Dow Dividend Royalty
Dividend stock investors looking for the best high-yield investments don’t need to pore over an arcane list of companies. Some of the best high-yield dividend-paying stocks are famous blue chips that make up the Dow Jones Industrial Average.
It’s no secret why. A good dividend stock has an established brand, reliable cash flow and a fairly stable business model. The top dividend-paying stocks in the Dow are household names that aren’t going anywhere and, thus, can offer big dividends without the fear that sales will dry up and cause the dividend yield to dry up in kind.
But even among the high-yield dividend stocks in Dow, there is clearly a hierarchy of investments. Some throw off 3%, but others offer a dividend yield of 4%, 5% or even 6%.
So who’s No. 1? Let’s find out now with this list of the top 10 Dow dividend stocks:
#10 Dow Dividend Stock- Chevron (CVX)
Market Cap: $205 billion
Annual Dividend: $2.88
Coming in at No. 10 on the list is integrated oil and gas company Chevron Corp. (NYSE: CVX). Chevron is truly a dividend aristocrat, and has been paying shareholders a dividend for 99 years. This quarter, CVX will dole out 72 cents to shareholders.
In the past 12 months, CVX stock has jumped 37%. More recently, CVX stock is up 12% since the start of 2011. Also, analysts are projecting a 19-cent jump in EPS this quarter, compared to this quarter last year. With a 2.8% yield, Chevron rounds out our list.
#9 Dow Dividend Stock- Dupont (DD)
Market Cap: $48 billion
Annual Dividend: $1.64
Having paid a dividend since 1904, conglomerate Dupont (NYSE: DD) just gave its shareholders a quarterly dividend of 41 cents on March 14. Year-to-date, shares of Dupont are up 7%, compared to gains of 3% and 2% for the Dow Jones and S&P 500, respectively.
Over the past 12 months, shareholders have watched this stock climb 43%. It is also important to note that analysts are projecting EPS to be 12 cents better this quarter than DD’s EPS last year.
#8 Dow Dividend Stock- McDonald’s (MCD)
Market Cap: $77 billion
Annual Dividend: $2.44
Fast food giant McDonald’s Corp. (NYSE: MCD) provides its shareholders with an annual dividend of $2.44, good for a 3.2% yield and the No. 8 spot on this list. So far, 2011 has been a down year for MCD, as its stock price has decreased 5% since January. However, the stock is up 10% in the past 12 months.
McDonald’s just served up its quarterly dividend on March 15, and has been paying out quarterly dividends for 25 years.
#7 Dow Dividend Stock- Intel (INTC)
Market Cap: $109 billion
Annual Dividend: 72 cents
While semiconductor chip maker Intel Corp. (NASDAQ: INTC) comes in at No. 7 on this list for its high dividend yield, its stock performance has been less than stellar. Year-to-date, INTC stock has dropped 5%, and in the past 12 months, the tech stock is down 10%, while the Nasdaq is up more than 11% during that time.
On March 1, shareholders received their quarterly dividend of 18 cents, which helps soothe the stock losses somewhat. On the bright side, the company did post quarterly earnings growth of 39% in its most recent income statement.
#6 Dow Dividend Stock- Johnson & Johnson (JNJ)
Market Cap: $159 billion
Annual Dividend: $2.16
Johnson & Johnson (NYSE: JNJ) may be known for its wide-ranging consumer health care products, but it should also be known for the dividend it has been paying shareholders since 1944. On March 15, JNJ doled out 54 cents to shareholders, good for a 3.6% yield.
This high dividend yield has eased the headaches of some shareholders who have watched the company’s stock price decrease 6% year-to-date, and 10% over the past 12 months. Analysts are also projecting earnings to be down 4 cents this quarter, compared to this quarter last year.
#5 Dow Dividend Stock- Kraft (KFT)
Market Cap: $54 billion
Annual Dividend: $1.16
Consumer staple Kraft Foods (NYSE: KFT) has watched its stock decline 2% since the start of 2011. However, over the past 12 months, the stock is still up 4%. Kraft has been paying a quarterly dividend since 2001, and on April 14, will dish out 29 cents to shareholders.
Earnings wise, analysts are projecting EPS to be 2 cents lower than this quarter last year. Overall, KFT has had mixed numbers as of late, but its high dividend yield has been a positive for stockholders.
#4 Dow Dividend Stock- Pfizer (PFE)
Market Cap: $159 billion
Annual Dividend: 80 cents
Biopharmaceutical giant Pfizer (NYSE: PFE) is next on the list with a 4% dividend yield. Year-to-date, PFE stock has climbed 15%, compared to gains of 3% and 2% for the Dow Jones and S&P 500, respectively. And since July 2010, this stock is up an impressive 35%.
Shareholders are also pleased with the spike in PFE’s dividend. The company increased its quarterly dividend from 18 cents to 20 cents on March 1. Impressively, PFE has been rewarding its shareholders with a dividend for 110 years. Based on its recent stock surge and its high dividend yield, Pfizer stock is a “buy” on many people’s lists.
#3 Dow Dividend Stock- Merck (MRK)
Market Cap: $97 billion
Annual Dividend: $1.52
Global health care company Merck & Co. (NYSE: MRK) produces medicines, vaccines, biologic therapies, and consumer and animal products. 2011 has been a tough year for MRK so far, as the stock price has fallen 12%, compared to small gains by the broader markets. Looking further back, this stock is down 17% over the past 12 months.
While its stock price continues to decline, MRK will still be paying out a dividend of 38 cents on April 7, for its shareholders of record on March 15. MRK has been paying a dividend since 1935.
#2 Dow Dividend Stock- Verizon (VZ)
Market Cap: $100 billion
Annual Dividend: $1.95
Communication service provider Verizon Communications (NYSE: VZ) will be providing shareholders with a quarterly dividend of 49 cents on May 2. So far in 2011, VZ stock hasn’t impressed many, as it is down 1%. However, the stock is up 2% in the past three months, and 12% in the past six months.
It should also be noted that Verizon reported a robust profit margin of +18% last quarter. In its last income statement, VZ posted a quarterly earnings growth of 147%, year-over-year. Verizon has been paying a dividend since 1984.
#1 Dow Dividend Stock- AT&T (T)
Market Cap: $164 billion
Annual Dividend: $1.72
With a 6.1% dividend yield, AT&T (NYSE: T) comes in at No. 1 on the list. AT&T has been rewarding shareholders with a dividend since 1984, the same year as its biggest competitor and No. 2 on this list, Verizon. AT&T’s stock has not fared as well as the competition, however, and is down 6%, year-to-date.
Additionally, analysts are projecting EPS to be down 1 cent this quarter, compared to last year. While AT&T’s stock performance hasn’t wowed investors this year, its continually high dividend yield eases some of shareholders’ worries.
The company just announced plans to buy T-Mobile in a $39 billion deal, which, if approved, would create the largest cell phone company in the United States. (See 5 Shockwaves Caused by AT&T – T Mobile Deal.)