10 Best Dow Jones Dividend Stocks According to Wall Street Analysts

2. Microsoft Corporation (NASDAQ:MSFT)

Upside Potential as of February 6: 22.5%

An American multinational tech giant, Microsoft Corporation (NASDAQ:MSFT) has fallen by over 6% in the past five days. The introduction of DeepSeek’s R1 model has sparked concerns for Microsoft, given its significant investments in OpenAI, the creator of the O1 series. In addition, although the company exceeded Wall Street’s expectations with its second-quarter earnings, it wasn’t enough to convince investors to drive the stock price to new highs.

That said, regarding the controversy surrounding DeepSeek, Microsoft Corporation (NASDAQ:MSFT)’s CEO, Satya Nadella, who is known for his strategic adaptability, said that the management could potentially turn this challenge into an opportunity. Nadella has previously embraced open-source strategies, such as incorporating Chromium into Edge and expanding GitHub Copilot to support various AI models. With AI becoming more commoditized, Microsoft’s Azure cloud platform could adjust by offering open-source models as APIs and integrating more affordable models like R1, ensuring it remains attractive to enterprise customers. While short-term challenges may arise if OpenAI faces setbacks, the company’s flexibility could help position Azure as a leading player in the long term, even in a market with reduced margins.

In addition, Microsoft Corporation (NASDAQ:MSFT) posted strong earnings on many fronts in fiscal Q2 2025. The company’s revenue reached $69.6 billion, which showed a 12% growth from the same period last year. The company’s net income of $24.1 billion saw a 10% year-over-year rise. A significant driver of this growth was the 15% increase in revenue from Microsoft 365 Commercial products and cloud services, bolstered by a 16% rise in Microsoft 365 Commercial cloud revenue.

Microsoft Corporation (NASDAQ:MSFT) ended the quarter with a robust cash position, holding more than $17.4 billion in cash and cash equivalents. The company generated $22.2 billion in operating cash flow, an increase from $18.8 billion in the same period last year. Moreover, the company returned $9.5 billion to its investors through dividends and share buybacks. It currently offers a quarterly dividend of $0.83 per share and has a dividend yield of 0.80%, as of February 6. MSFT is one of the best dividend stocks on our list as the company maintains a 19-year streak of consistent dividend growth.

At the end of Q3 2024, 279 hedge funds tracked by Insider Monkey held stakes in Microsoft Corporation (NASDAQ:MSFT), the same as in the previous quarter. These stakes have a total value of more than $91 billion. Among these hedge funds, Bill & Melinda Gates Foundation Trust was the company’s leading stakeholder in Q3.