Analysis of the Top Three Dividend Stocks in the Dow Jones Industrial Average
Should You Buy the 3 Highest-Paying Dividend Stocks in the Dow Jones?
A high dividend yield isn't enough to make a stock worth buying. The Dow Jones Industrial Average (DJINDICES: ^DJI) is an index of 30 top blue chip stocks. These are leaders in their fields, and since they're mostly large and established, they lean toward value, not growth. Indeed, 29 of them pay a dividend, with the exception being Amazon, which became a Dow component only a few weeks ago.
Investing in Dow Jones stocks can be a smart move as these are companies with leading positions that provide strong moats protecting them from competition and potential.
But being in the Dow doesn't automatically make a stock a buy. Even a high dividend yield doesn't make a stock a default buy. In fact, it's often a reason for caution, since it could be caused by a declining stock price.
The three top-yielding Dow Jones stocks as I write this are Verizon (NYSE: VZ), 3M (NYSE: MMM), and Dow Inc. (NYSE: DOW). Let's see if they look like worthy investments right now.
- Verizon: 6.4% yield
Verizon stock hasn't delivered for investors over the past few years; it's down 28% over the past five years, and that includes a 13% gain year to date. Even with dividends included, it has seriously underperformed the broader market as measured by the S&P 500 index over the past five years. - 3M: 5.8% yield
3M has also disappointed investors over the past few years, but the reasons are more acute. It's been dealing with a host of issues, notably that it hasn't been churning out the innovations it became famous for over many years. It's also in the middle of settling several lawsuits. As a result, 3M stock is down 56% over the past five years. - Dow Inc.: 4.9%
Dow is a chemical company that was spun off from what's now DuPont de Nemours in 2019. It's been dealing with near-term challenges, like many companies, managing through the impact of inflation, since it manufactures a broad range of chemical substances for business-to-business clients to use in products and manufacturing.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.