In this article we will be taking a look at the 10 best Dow dividend stocks to double your income. To skip our detailed analysis of the Dow Jones index and its dividend stocks, you can go directly to see the 5 Best Dow Dividend Stocks to Double Your Income.
The Dow Jones Industrial Average, also known as the Dow Jones or the Dow, is a stock market index comprising of 30 companies listed on American stock exchanges. These are mostly renowned and prominent companies, such as McDonald’s Corporation (NYSE:MCD), Verizon Communications (NYSE:VZ), and Chevron Corporation (NYSE:CVX). The index’s weighting method is the price-weighted measurement, and its companies are primarily listed on the New York Stock Exchange and NASDAQ.
The Dow Jones Industrial Average gained about 18.7% in 2021, according to Forbes. The Dow was not the only benefactor for the year, as was seen by the Nasdaq Composite’s gain of 21.4%.
Some of the main contributors to the Dow’s positive performance in February were Johnson & Johnson (NYSE:JNJ) and 3M Company (NYSE:MMM).
Both of these top contributors have been added to our list below, also being two popular dividend stock picks primarily for income investors. Johnson & Johnson (NYSE:JNJ) has had a record of dividend growth for the past 59 years in a row, alongside a generous payout ratio of 42.8%. Similarly, the 3M Company (NYSE:MMM) has also raised its dividend continuously for the past 63 years, holding a payout ratio of 58.5% as well. As such, both stocks are among the best options for safe and lucrative dividend income, to the interest of hedge funds and other investors today.
Our Methodology:
Using Insider Monkey’s fourth quarter of 2021 hedge fund data, we have selected dividend stocks from the Dow Jones index that are popular among the 924 hedge funds tracked. We also took into account analyst ratings to pick stocks analysts are optimistic about in light of recent market trends. The stocks are ranked on the basis of dividend yield, from the lowest to the highest dividend yield, while we have also mentioned their price gains in the past six months and year to date as of late February 2022.
Photo by Dan Dennis on Unsplash
Best Dow Dividend Stocks to Double Your Income
10. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 63
Dividend Yield: 1.6%
Walmart Inc. (NYSE:WMT) is a retail giant operating in the US and internationally. It works with supercenters, supermarkets, warehouse clubs, and other stores. The company is among the largest hypermarkets and supercenters operators in the world.
Morgan Stanley’s Simeon Gutman holds an Overweight rating on Walmart Inc. (NYSE:WMT) shares as of this February.
The company’s EPS in the fiscal fourth quarter of 2022 was $1.53, beating estimates by $0.03. Walmart Inc. (NYSE:WMT) also had revenue of $151.5 billion, beating the previous quarter’s $139.2 billion revenue.
Out of 924 hedge funds, 63 hedge funds were long Walmart Inc. (NYSE:WMT) in the fourth quarter of 2021. Their total stake value was $7.1 billion.
Walmart Inc. (NYSE:WMT), like McDonald’s Corporation (NYSE:MCD), Verizon Communications (NYSE:VZ), and Chevron Corporation (NYSE:CVX) is among the top stock picks for hedge funds in 2022.
9. McDonald’s Corporation (NYSE:MCD)
Number of Hedge Fund Holders: 57
Dividend Yield: 2.2%
McDonald’s Corporation (NYSE:MCD) is a large restaurant franchise owner and operator. The company is among the most renowned food chain names in the world. It has raised its dividend for the past 45 years.
In January, Barclays analyst Jeffrey Bernstein reiterated an Overweight rating on McDonald’s Corporation (NYSE:MCD) shares.
Baird analyst David Tarantino also holds an Outperform rating on the company’s shares as of this January, while noting that McDonald’s Corporation (NYSE:MCD) is likely to yield a good risk-adjusted total return over the next 12+ months.
Renaissance Technologies is the largest stakeholder in McDonald’s Corporation (NYSE:MCD) as of the fourth quarter of 2021 when a total of 57 hedge funds were long the stock.
8. Caterpillar Inc. (NYSE:CAT)
Number of Hedge Fund Holders: 53
Dividend Yield: 2.4%
Caterpillar Inc. (NYSE:CAT) is an industrials company, selling construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. The company offers a highly diversified range of products and services, such as even operating and finance leases and wholesale financing plans.
Tigress Financial analyst Ivan Feinseth holds a Buy rating on shares of Caterpillar Inc. (NYSE:CAT) as of this February.
The company’s fiscal fourth quarter of 2021 results show an EPS of $2.69 and revenue of $13.8 billion. Both beat estimates by $0.43 and $558.9 million, respectively.
Our hedge fund data for the fourth quarter of 2021 shows 53 hedge funds holding stakes in Caterpillar Inc. (NYSE:CAT), compared to 46 hedge funds in the previous quarter.
McDonald’s Corporation (NYSE:MCD), Verizon Communications (NYSE:VZ), and Chevron Corporation (NYSE:CVX) are some other big dividend stocks to keep an eye on this year, alongside Caterpillar Inc. (NYSE:CAT).
7. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 83
Dividend Yield: 2.6%
Johnson & Johnson (NYSE:JNJ) is a health care and pharmaceuticals company. It offers baby care products, oral care products, skin health and beauty products, under the Johnson’s, Aveeno, Listerine, and Clean & Clear brands. Having grown its dividend without rest for the past 59 years, the company is among the best Dow dividend stocks to increase your income.
Raymond James’ Jayson Bedford holds an Outperform rating on Johnson & Johnson (NYSE:JNJ) shares as of this January.
Johnson & Johnson (NYSE:JNJ) had an EPS of $2.13 and revenue of $24.8 billion in the fiscal fourth quarter of 2021. The EPS beat estimates by $0.01, while the revenue beat the previous quarter’s revenue of $23.3 billion.
Johnson & Johnson (NYSE:JNJ) had 83 hedge funds holding stakes in it in the fourth quarter of 2021, of which Fundsmith LLP was the largest stakeholder. The fund held 7,219,198 shares in the company, worth over $1.2 billion, while the total stake value for all the hedge funds was $7.4 billion.
6. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 70
Dividend Yield: 2.8%
The Coca-Cola Company (NYSE:KO) is among the most famous beverage companies across the globe. The company provides a wide range of drinks to its consumers, including soft drinks such as Diet Coke and Fanta, and even tea and coffee. Their quarterly dividend has increased for the past 59 years, making it one of the safest dividend stocks.
The Coca-Cola Company (NYSE:KO) received an Outperform rating from Evercore ISI’s analyst Robert Ottenstein just this February.
The Coca-Cola Company’s (NYSE:KO) earnings history shows an EPS of $0.45 and revenue of $9.5 billion in the fiscal fourth quarter of 2021. The EPS beat estimates by $0.04, while the revenue also beat estimates by $579.3 million.
For the fourth quarter of 2021, 70 hedge funds were long The Coca-Cola Company (NYSE:KO), with a total stake value of over $28.6 billion. Out of these hedge funds, Warren Buffett’s Berkshire Hathaway was the largest stakeholder in the stock, holding 400,000,000 shares worth about $23.7 billion.
Like McDonald’s Corporation (NYSE:MCD), Verizon Communications (NYSE:VZ), and Chevron Corporation (NYSE:CVX), The Coca-Cola Company (NYSE:KO) is among the most popular stock picks for hedge funds in 2022.
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Disclosure: None. 10 Best Dow Dividend Stocks to Double Your Income is originally published on Insider Monkey.
