In this article, we will take a look at some of the best highest yielding dividend stocks in the Dow.
The Dow Jones Industrial Average, or simply the Dow, is one of the most well-known and influential stock market indices globally. It monitors the performance of 30 publicly traded companies on US stock exchanges, covering a broad array of industries. In the past 12 months, the index has surged by over 15%, compared with a nearly 25% return of the broader market.
Today, tech stocks have dominated the market, as seen by the NASDAQ’s nearly 30% gain over the past year, outperforming both the Dow and the broader market. However, the Dow’s underperformance in this period contrasts with its historical performance. A report from Barron’s highlighted that in 1978, 1980, and 1992, the Dow outpaced the Nasdaq by at least seven percentage points. The most notable period of Dow dominance occurred during the dot-com bubble’s collapse, with 12 instances of outperformance between 1999 and 2002.
When comparing the Dow to the broader market, the Dow has also shown strong results. According to S&P Global, from the past 30 years up until June 2021, the market returned 10.6%, while the Dow slightly exceeded that with an 11.16% return. This outperformance is largely due to the Dow’s stable, industry-leading companies that offer reliable dividends and steady yields.
Investing in high-yielding Dow Jones stocks can be an appealing strategy for those seeking reliable income and potentially higher returns. When selecting dividend stocks for their portfolios, investors often focus on dividend yields. However, it’s important to recognize that companies with high yields but lacking financial stability may be at risk of cutting dividends, especially amid global economic challenges and rising interest rates. Therefore, investment strategies that target high yields should also emphasize the financial strength and stability of the companies involved.
The Dow Jones Dividend 100 Index tracks the performance of 100 high-dividend stocks selected for their reliable dividend payments and strong financial fundamentals. In any income-focused strategy, investors typically aim for both yield and capital appreciation. The Dow Jones Dividend 100 Indices have consistently provided higher yields and comparable capital gains over the long term when compared to their benchmarks. According to S&P Dow Jones Indices, between June 30, 2001, and June 30, 2023, the total return of the index, assuming dividends were reinvested, averaged 11.7% annually, outperforming the Dow Jones US Broad Stock Market Index, which returned 10.2% during the same period.
When evaluating dividend yields, many investors adopt the ‘Dogs of the Dow’ strategy, which involves picking the ten Dow stocks with the highest dividend yields. While this strategy hasn’t performed well in recent years, it has historically outpaced its benchmark over the long term. Michael O’Higgins discovered that, over a 26-year period, a hypothetical portfolio of high-dividend Dow stocks achieved an annualized return of 17.9%. This performance outperformed the Dow Jones Industrial Average’s annualized return of 13% during the same period. According to the Wall Street Journal, the investment strategy outperformed the DJIA in 2022 for the first time since 2018. This happened as investors turned to safer options amidst the market’s unpredictable swings. Given this, we will take a look at some of the highest yielding dividend stocks in the Dow.
Our Methodology:
For this article, we examined the companies within the Dow Jones index and identified 13 stocks with the highest dividend yields as of January 16. It’s worth noting that the majority of companies in the Dow Jones are dividend payers. We also considered hedge fund sentiment around each stock using Insider Monkey’s data for Q3 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
13. JPMorgan Chase & Co. (NYSE:JPM)
Dividend Yield as of January 16: 1.98%
JPMorgan Chase & Co. (NYSE:JPM) is an American multinational financial services and investment banking company. The company recently announced its Q4 2024 earnings and reported revenue of $43.74 billion, which showed a 13.4% growth from the same period last year. Its payment fees experienced double-digit growth for the fourth consecutive quarter, contributing to a record $18.1 billion in Payments revenue for the year. In the Consumer and Community Banking (CCB) segment, the company continued to expand its customer base across Consumer Banking, Business Banking, Card, and Wealth Management. For instance, nearly 2 million net new checking accounts were opened in 2024.
Investors are drawn to JPMorgan Chase & Co. (NYSE:JPM) due to its diverse revenue streams, which make it an attractive investment choice. By operating across consumer and commercial banking, capital markets, and asset management, the company’s diversification allows strong performance in one area to balance out challenges in another, contributing to greater overall stability. In the past 12 months, the stock has outperformed the market, surging by over 51%.
JPMorgan Chase & Co. (NYSE:JPM) is one of the best dividend stocks on our list as the company has been paying regular dividends to shareholders since 1972. It has also remained committed to its shareholder return, returning $3.5 billion to investors through dividends in the most recent quarter. It currently offers a quarterly dividend of $1.25 per share and has a dividend yield of 1.98%, as of January 16.
At the end of Q3 2024, 105 hedge funds tracked by Insider Monkey held stakes in JPMorgan Chase & Co. (NYSE:JPM), compared with 111 in the previous quarter. The collective value of these stakes is over $8.6 billion. Among these hedge funds, Fisher Asset Management was the company’s leading stakeholder in Q3.
12. 3M Company (NYSE:MMM)
Dividend Yield as of January 16: 2.01%
3M Company (NYSE:MMM) is an American multinational conglomerate that operates in a wide range of industries. The company earned a reputation for its commitment to research and development, focusing on creating unique products that offer pricing power and help expand market share. This sales growth drives margin improvement as higher volumes boost efficiency, leveraging 3M’s global reach. Moreover, new product introductions (NPI) often come with enhanced pricing capabilities. Altogether, NPI growth represents an opportunity not just for increasing revenue, but also for enhancing profit margins.
While 3M Company (NYSE:MMM) now presents a positive image, it faced significant challenges last year. These included spinning off its healthcare division and reducing its dividend by 50%. In addition, it has been grappling with ongoing legal and regulatory pressures for several years. However, the company is actively addressing these issues with a strategic plan to manage the related expenses. This improvement is reflected in the stock’s performance as it gained nearly 55% in the past 12 months.
3M Company (NYSE:MMM) also reported stable earnings in the third quarter of 2024. The company’s revenue came in at.07 billion, which showed a modest growth of 1% from the same period last year. The revenue also beat analysts’ estimates by $10.66 million. The company also delivered robust operational results, achieving double-digit growth in adjusted earnings and strong adjusted free cash flow. It displayed a solid cash position for the quarter, generating $1.5 billion in free cash flow. This allowed 3M to return $1.1 billion to shareholders through dividends and share buybacks. Before cutting its dividend earlier this year, 3M had upheld a 66-year streak of consecutive dividend increases. Currently, it pays a quarterly dividend of $0.70 per share and has a dividend yield of 2.01%, as of January 16.
The number of hedge funds tracked by Insider Monkey owning stakes in 3M Company (NYSE:MMM) jumped to 82 in Q3 2024, from 66 in the previous quarter. These stakes have a total value of roughly $3.6 billion. With over 2.7 million shares, Citadel Investment Group was the company’s largest stakeholder in Q3.
11. NIKE, Inc. (NYSE:NKE)
Dividend Yield as of January 16: 2.25%
NIKE, Inc. (NYSE:NKE) is an Oregon-based multinational footwear and apparel company that offers products for men, women, and children. The company boasts a strong economic moat, bolstered by its well-established brand presence. With six decades of industry dominance, the company has built substantial mindshare and proven its resilience over time.
NIKE, Inc. (NYSE:NKE)’s exceptional marketing and storytelling abilities further enhance its global brand visibility, supported by high-profile athlete endorsements, such as LeBron James and Cristiano Ronaldo, and partnerships with major sports leagues, including the recently renewed agreement with the NFL to serve as its exclusive uniform provider until 2038. In addition, the company is recognized for creating innovative products that attract consumers.
NIKE, Inc. (NYSE:NKE) reported mixed results for fiscal Q2 2025. The company recorded revenue of $12.35 billion, a 7.7% decline compared to the same quarter last year. Wholesale revenues also saw a decrease of 3% on a Yoy basis, totaling $6.9 billion. Inventory levels remained steady at $8.0 billion, consistent with the previous year, driven by higher unit volumes offset by lower input costs and shifts in the product mix.
However, the company’s cash position remained stable, which makes it a solid investment option for income investors. NIKE, Inc. (NYSE:NKE) ended the quarter with $7.9 billion available in cash and cash equivalents, up 1% from the same quarter last year. In addition, the company returned $1.6 billion to shareholders through dividends and share repurchases. This cash position has enabled the company to grow its payouts for 23 consecutive years, which makes NKE one of the best dividend stocks on our list. Currently, it pays a quarterly dividend of $0.40 per share and has a dividend yield of 2.25%, as recorded on January 16.
NIKE, Inc. (NYSE:NKE) was a hedge fund favorite in Q3 2024 with 75 elite money managers investing in the company, up from 66 in the previous quarter, according to Insider Monkey’s database. The stakes owned by these funds are worth over $5 billion in total.
10. The Procter & Gamble Company (NYSE:PG)
Dividend Yield as of January 16: 2.52%
The Procter & Gamble Company (NYSE:PG) ranks tenth on our list of the best highest yielding dividend stocks in the Dow. On January 14, the multinational consumer goods company declared a quarterly dividend of $1.0065 per share, which was in line with its previous dividend. Overall, the company holds one of the longest history of increasing its dividends, spanning over 68 years. The stock offers a dividend yield of 2.52%, as of January 16.
The Procter & Gamble Company (NYSE:PG) is grabbing investors’ attention because of its strong operational performance. In the past 12 months, the stock has surged by over 7%. Despite inflationary pressures, the company has consistently delivered strong performance by effectively implementing significant price increases, achieving organic sales growth in every quarter of fiscal 2023.
In fiscal Q1 2025, The Procter & Gamble Company (NYSE:PG) reported revenue of $21.7 billion, a 1% decrease compared to the same period last year. The company generated $4.3 billion in operating cash flow, with an adjusted free cash flow productivity of 82%, meeting expectations. P&G also continued to return value to shareholders, distributing $4.4 billion through dividends and share buybacks.
In addition to strong performance in its recent quarter, The Procter & Gamble Company (NYSE:PG) also provided an upbeat outlook for fiscal 2025, anticipating sales growth between 2% and 4%, along with a 10% to 12% increase in diluted net EPS, compared to $6.02 in fiscal 2024. Should the company reach the midpoint of its forecast, it would set a new record with a diluted EPS of $6.68 for fiscal 2025.
The Procter & Gamble Company (NYSE:PG) was included in 68 hedge fund portfolios at the end of Q3 2024, up from 64 in the previous quarter, as per Insider Monkey’s database. The stakes owned by these hedge funds are worth more than $8.8 billion in total. Ken Fisher’s Fisher Asset Management was the company’s leading stakeholder in Q3.
9. McDonald’s Corporation (NYSE:MCD)
Dividend Yield as of January 16: 2.54%
McDonald’s Corporation (NYSE:MCD) is an American multinational fast food company. Many investors turned away from the company due to slowing comparable store sales and an E. coli outbreak in the US between September and October 2024. However, analysts suggest this downturn could be a prime buying opportunity. McDonald’s remains a dominant force in the fast-food industry, with over 40,000 locations across more than 100 countries. Known for its iconic menu, and its commitment to quality, convenience, and affordability, the company has firmly established itself as a household name. Its focus on innovation through digital ordering, delivery services, and sustainability efforts aligns with evolving consumer preferences, solidifying its leadership in the expanding fast-food market.
In the third quarter of 2024, McDonald’s Corporation (NYSE:MCD) reported $6.87 billion in revenue, marking a 3% rise from the same period the previous year. Over the past year, systemwide sales to loyalty members across around 50 loyalty markets exceeded $28 billion, with nearly $8 billion generated in the most recent quarter. These numbers indicate that the company remains steady and has the potential for further growth.
In addition, McDonald’s Corporation (NYSE:MCD) is also a strong dividend payer. In September 2024, the company announced its 48th consecutive annual dividend hike, which makes it one of the best dividend stocks. Its quarterly dividend comes in at $1.77 per share for a dividend yield of 2.54%, as of January 16.
As of the close of Q3 2024, 60 hedge funds tracked by Insider Monkey held stakes in McDonald’s Corporation (NYSE:MCD), down from 67 in the preceding quarter. These stakes have a consolidated value of over $2.3 billion. Among these hedge funds, Adage Capital Management was the company’s leading stakeholder in Q3.
8. Cisco Systems, Inc. (NASDAQ:CSCO)
Dividend Yield as of January 16: 2.67%
Cisco Systems, Inc. (NASDAQ:CSCO) is an American multinational technology company that mainly specializes in networking hardware, software, and telecommunications equipment. The company delivered strong earnings for fiscal Q1 2025, with revenues of $13.8 billion. Although this marked a 6% decline from the previous year, it surpassed analysts’ expectations by $70.5 million. The company reported a net income of $2.7 billion for the quarter and maintained a solid financial position. In addition, Cisco advanced its development initiatives by acquiring DeepFactor, Inc., a specialist in cloud-native application security, and Robust Intelligence, Inc., a company focused on AI security solutions.
Cisco Systems, Inc. (NASDAQ:CSCO) surged by over 18% in the past 12 months. The company continues to invest heavily in innovation. In its latest quarterly earnings report, it highlighted that clients are focusing on essential infrastructure investments to advance AI development. Cisco emphasized that its broad product portfolio positions it to take full advantage of this trend. The company’s revenue, gross margin, and earnings per share exceeded expectations, demonstrating significant operating leverage and demonstrating or surpassing the upper end of its guidance.
Cisco Systems, Inc. (NASDAQ:CSCO) is also a solid investment option from a dividend point of view. In the recent quarter, the company’s cash position came in strong with $3.7 billion in operating cash flow, which showed a 54% growth from the same period last year. It also had $18.7 billion available in cash and cash equivalents at the end of the quarter. The company also returned $1.6 billion to shareholders through dividends.
Cisco Systems, Inc. (NASDAQ:CSCO) is one of the best dividend stocks on our list with 17 consecutive years of dividend growth under its belt. It offers a quarterly dividend of $0.40 per share and has a dividend yield of 2.67%, as of January 16.
Insider Monkey’s database of Q3 2024 showed that 60 hedge funds owned stakes in Cisco Systems, Inc. (NASDAQ:CSCO), worth more than $3 billion.
7. International Business Machines Corporation (NYSE:IBM)
Dividend Yield as of January 16: 3.02%
International Business Machines Corporation (NYSE:IBM) is an American multinational tech company that focuses on developing business-class systems tailored for use by other organizations. The company recently announced its plans to acquire Applications Software Technology, a global consulting firm specializing in solutions for the Oracle Cloud Applications Suite. IBM stated that this acquisition will enhance its expertise in the public sector and Oracle Cloud Applications, enabling clients to navigate their business transformations with greater confidence.
Unlike many other AI companies, International Business Machines Corporation (NYSE:IBM) focuses on securing long-term subscription and technical support contracts rather than making quick sales. The setup process can be slow, especially for complex projects like establishing generative AI systems. In the spring of 2023, IBM launched its generative AI platform, watsonx. By the following year, watsonx had secured over $2 billion in multiyear contracts. Just one quarter later, the order book for watsonx grew by an additional $1 billion, marking a 50% increase in just three months, which is considered a tipping point. Over time, the company will convert these paper contracts into cash sales while continuing to sign more AI deals.
In addition to its AI platform, International Business Machines Corporation (NYSE:IBM)’s dividend history also makes it an appealing investment option. The company has remained committed to its shareholder obligation, returning $1.5 billion to investors through dividends in the most recent quarter. Moreover, it maintains a 29-year streak of consistent dividend growth. The company currently pays a quarterly dividend of $1.67 per share and has a dividend yield of 3.02%, as of January 16.
At the end of the third quarter of 2024, 56 hedge funds owned stakes in International Business Machines Corporation (NYSE:IBM), up from 54 in the previous quarter, as per Insider Monkey’s database. The overall value of these stakes is over $1.7 billion. With nearly 2.6 million shares, Holocene Advisors was the company’s leading stakeholder in Q3.
6. The Coca-Cola Company (NYSE:KO)
Dividend Yield as of January 16: 3.13%
An American multinational beverage company, The Coca-Cola Company (NYSE:KO) ranks sixth on our list of the highest yielding dividend stocks in the Dow. The company’s strongest competitive advantage lies in its iconic brand, which reinforces its economic moat. It has consistently delivered a product that consumers worldwide recognize and trust, fostering a level of brand loyalty that most companies aspire to achieve. This loyalty grants the company the ability to adjust its pricing. Although unit sales dipped by 1% in the latest quarter, the impact was mitigated by favorable pricing strategies, a common scenario that underscores the strength of its customer base. This resilience enhances the company’s long-term viability.
As a well-established leader in its industry, The Coca-Cola Company (NYSE:KO) generates significant profits, with operating margins often surpassing 20%, reflecting an efficient and profitable operation. Shareholders face minimal financial risk, as the company continues to deliver profits even during economic downturns. In the third quarter of 2024, it reported nearly $12 billion in revenue, surpassing analysts’ expectations by $290 million. The company showcased robust cash generation, with operating cash flow reaching $2.9 billion and free cash flow amounting to $1.6 billion. Additionally, it achieved an impressive adjusted operating margin of 30.7%, highlighting its strong profitability.
The Coca-Cola Company (NYSE:KO) is a strong dividend payer, having raised its payouts for 62 years in a row. The company offers a quarterly dividend of $0.485 per share and has a dividend yield of 3.13%, as of January 16.
As of the close of Q3 2024, 69 hedge funds in Insider Monkey’s database owned stakes in The Coca-Cola Company (NYSE:KO), up from 68 in the previous quarter. These stakes have a consolidated value of roughly $35 billion. Warren Buffett’s Berkshire Hathaway was the company’s leading stakeholder in Q3.
5. Merck & Co., Inc. (NYSE:MRK)
Dividend Yield as of January 16: 3.22%
Merck & Co., Inc. (NYSE:MRK) is an American pharmaceutical company that offers innovative health solutions to its consumers. In the third quarter of 2024, the company posted revenue of $16.7 billion, which showed a 4% growth from the same period last year. Its pipeline is progressing and expanding, reflecting the company’s success in developing a sustainable innovation engine. This advancement is positioning Merck with a more diverse portfolio, poised to drive future growth. Since the start of 2025, the stock has surged by over 4%.
Over the years, Merck & Co., Inc. (NYSE:MRK) has established itself as a leader in specialty pharmaceuticals and oncology, with its standout cancer treatment, Keytruda, revolutionizing treatment methods and driving notable revenue increases. Its dominant market position generates significant cash flows, which are then utilized to provide returns to shareholders. In the most recent quarter, Keytruda’s sales increased by 17% compared to the previous year, reaching $7.4 billion.
This performance was also highlighted in GreensKeeper Asset Management’s Q3 2024 investor letter. Here is what the firm shared:
“Merck & Co., Inc. (NYSE:MRK) was our second-largest detractor this quarter, declining -8.3%. MRK’s leading HPV vaccine, GARDASIL 9, faced challenges internationally due to inventory buildup within its Chinese distributor, which is expected to reduce shipments for the remainder of 2024. Despite this short-term impact, the long-term outlook for GARDASIL 9 remains promising. Meanwhile, the company’s $27 billion Keytruda cancer juggernaut continues to grow at a healthy clip, powering earnings growth.”
Merck & Co., Inc. (NYSE:MRK) currently pays a quarterly dividend of $0.81 per share, having raised it by 5.2% in November 2024. This marked the company’s 14th consecutive year of dividend growth, which makes MRK one of the best dividend stocks on our list. The stock has a dividend yield of 3.22%, as of January 16.
According to Insider Monkey’s database of Q3 2024, 86 hedge funds held stakes in Merck & Co., Inc. (NYSE:MRK), compared with 96 in the preceding quarter. The consolidated value of these stakes is over $7.1 billion. Ken Griffin’s Citadel Investment Group was one of the company’s leading stakeholders in Q3.
4. Johnson & Johnson (NYSE:JNJ)
Dividend Yield as of January 16: 3.36%
Johnson & Johnson (NYSE:JNJ) is an American pharmaceutical company, based in New Jersey. The company specializes in a wide range of biotech and medical products and offers related services to consumers. It reported strong third-quarter 2024 earnings, with revenue reaching $22.4 billion, a 5.25% increase from the same quarter last year. Over the first nine months, the company generated $14 billion in free cash flow, up from $11.9 billion the previous year. Following its improved performance and the recent acquisition of V-Wave, the company has updated its 2024 outlook, including adjusted operational earnings per share (EPS). The company now expects adjusted operational sales growth between 5.7% and 6.2%, with a midpoint of 6.0%.
Johnson & Johnson (NYSE:JNJ) is drawing attention for its continued innovation and recent acquisitions. It recently unveiled plans to invest more than $14 billion to enhance its focus on central nervous system disorders by acquiring Intra-Cellular Therapies. The company stated that the deal would be funded through a combination of cash reserves and debt and is anticipated to close later this year. This acquisition represents the largest biotech deal in over a year, signaling a revival in healthcare mergers and acquisitions after a slowdown in 2024 when major pharmaceutical firms took time to integrate previous post-pandemic acquisitions.
Johnson & Johnson (NYSE:JNJ)’s dividend history has also attracted investors over the years. The company has been rewarding shareholders with growing dividends for the past 62 years. Currently, it pays a quarterly dividend of $1.24 per share and has a dividend yield of 3.36%, as of January 16.
As of the end of Q3 2024, 81 hedge funds in Insider Monkey’s database held stakes in Johnson & Johnson (NYSE:JNJ), growing from 80 in the previous quarter. These stakes are worth over $5.4 billion in total.
3. Amgen Inc. (NASDAQ:AMGN)
Dividend Yield as of January 16: 3.53%
Amgen Inc. (NASDAQ:AMGN) is a California-based multinational biopharmaceutical company. The stock is down by over 11% in the past 12 months. The decline could be attributed to its leading weight loss candidate, MariTide, falling short of expectations in a mid-stage trial. Despite this, the stock has risen nearly 4% year-to-date. The biotech company still has to conduct phase 3 trials, and if these confirm the mid-stage results, MariTide could secure a small niche in the rapidly growing weight loss market.
In addition to this, analysts are focusing on Amgen Inc. (NASDAQ:AMGN) due to several other reasons. Notably, the company’s financial performance remains robust, with a 23% year-over-year revenue increase to $8.5 billion in the third quarter, driven by an acquisition. Even without this, its organic sales grew a solid 8% year over year. The company saw double-digit sales growth across ten products, including $1.2 billion from its rare disease treatments, fueled by several innovative early-stage medications. Amgen reported $3.3 billion in free cash flow for the quarter, an increase from $2.5 billion in Q3 2023. This growth was mainly driven by strong business performance and favorable timing in working capital, though it was partially offset by lower interest income.
In December 2024, Amgen Inc. (NASDAQ:AMGN) declared a 5.8% hike in its quarterly dividend to $2.38 per share. This was the company’s 13th consecutive year of dividend growth, which makes AMGN one of the best dividend stocks on our list. The stock’s dividend yield on January 16 came in at 3.53%.
Of the 900 hedge funds tracked by Insider Monkey at the end of Q3 2024, 68 funds held stakes in Amgen Inc. (NASDAQ:AMGN), compared with 69 in the preceding quarter. The total value of these stakes is more than $1.7 billion.
2. Chevron Corporation (NYSE:CVX)
Dividend Yield as of January 16: 4.09%
An American multinational energy company, Chevron Corporation (NYSE:CVX) ranks second on our list of the highest yielding dividend stocks in the Dow. The company has been attracting investor interest due to its extensive operations and strong cash flow generation. The CEO recently stated that the company is on track to boost its free cash flow by $6 billion to $8 billion next year while cutting expenses by several billion dollars. The anticipated results are expected to be driven by the launch of new or expanded oil production projects in Kazakhstan, US shale, and the offshore Gulf of Mexico.
In August, Chevron Corporation (NYSE:CVX) began producing oil from a groundbreaking deepwater field in the US Gulf of Mexico, operating under extreme pressure. Once fully operational, the project is expected to produce up to 75,000 barrels of oil per day. In addition, the company has two more offshore projects planned to follow. The company posted strong earnings for the third quarter of 2024, with revenues totaling $50.67 billion, exceeding analysts’ expectations by $1.63 billion. It also saw a 7% year-over-year increase in global production, reaching nearly 3.4 million barrels of oil equivalent per day (BOE/d). This growth was driven by record production in the Permian Basin and the acquisition of PDC Energy.
Chevron Corporation (NYSE:CVX) also demonstrated a solid cash position in the most recent quarter. The company generated $9.7 billion in operating cash flow, growing from $46.3 billion in the prior-year period. Moreover, it paid $7.7 billion to shareholders through dividends and share buybacks. Due to this cash generation, the company’s dividend growth streak spans over 37 years and it currently offers a quarterly dividend of $1.63 per share. The stock has a dividend yield of 4.09%, as of January 16.
By the end of Q3 2024, Chevron Corporation (NYSE:CVX) was held in 63 hedge fund portfolios, a slight decrease from 64 in the previous quarter, according to Insider Monkey’s database. The total value of the stakes held by these hedge funds surpasses $21 billion.
1. Verizon Communications Inc. (NYSE:VZ)
Dividend Yield as of January 16: 7.12%
Verizon Communications Inc. (NYSE:VZ) is an American multinational telecommunication company. It is undergoing a major shift within the telecommunications sector. Sales from traditional sources like mobile devices are declining, as consumers prefer purchasing directly from brands. On the business side, the demand for networking equipment has dropped, largely due to the diminishing importance of old-fashioned landline phone services. This is happening in a highly competitive environment, where rivals are taking bold steps with pricing strategies. In the past 12 months, the stock has declined by nearly 2.5%.
That said, in the first nine months of 2024, Verizon Communications Inc. (NYSE:VZ)’s consumer revenue increased by 0.9% compared to the previous year, while business revenue fell by 2.1%, resulting in overall revenue growth of 0.3%. The consumer segment’s recovery was fueled by focused incentives and marketing campaigns, as well as the successful execution of its strategic initiatives, such as recent acquisitions. Third Point Management also highlighted the company’s acquisition in its Q3 2024 investor letter. Here is what the firm said:
“While some economic activity has been showing signs of slowing, the defensive composition of the current high yield market with a high mix of higher quality credit and short duration has let the rates tailwind overwhelm such concerns. The lowest quality sectors of the market have performed best, fueled by both soft/no landing expectations, as well as two positive events in the beleaguered telecom space. Telecom/cable have been poor performers year to date due to overhang from the growth of FWA (aka “wireless cable”) and increased fiber building, however the sector re-rated materially on two deals. Second, Verizon Communications Inc. (NYSE:VZ) announced a deal to acquire Frontier Communications (FYBR), a transaction which the fund benefited from by virtue of its investment in FYBR debt. This transaction, aimed at increasing’s VZ fiber footprint, has led to broad revaluation of fiber retail networks that we think is appropriate. While we continue to expect to see FWA rapidly erode non-upgraded cable and especially copper’s share of the low-end broadband market, the VZ deal underscores the value of the higher end footprint.”
Verizon Communications Inc. (NYSE:VZ) also attracts income investors thanks to its solid financial position, which supports its reputation as a dependable dividend payer. In the first nine months of FY24, the company generated $26.5 billion in operating cash flow and $14.5 billion in free cash flow. With 18 years of consecutive dividend hikes, Verizon remains focused on providing value to its shareholders, offering a quarterly dividend of $0.6775 per share. It offers a dividend yield of 7.12%, as of January 16.
At the end of Q3 2024, 57 funds held stakes in Verizon Communications Inc. (NYSE:VZ), compared with 67 in the previous quarter. These stakes have a consolidated value of more than $3.2 billion. With nearly 25 million shares, GQG Partners was the company’s largest stakeholder in Q3.
Overall, Verizon Communications Inc. (NYSE:VZ) ranks first on our list of the highest yielding dividend stocks in the Dow. While we acknowledge the potential for VZ to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than VZ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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