8 Best Dividend Leaders to Buy According to Wall Street Analysts

3. Dow Inc. (NYSE:DOW)

Upside Potential as of December 19: 32.3%

Dow Inc. (NYSE:DOW) ranks third on our list of the best dividend leaders. The American chemicals company mainly operates in the material science industry and is involved in the manufacturing and marketing of a wide range of chemical, plastic, and agricultural products.

Dow Inc. (NYSE:DOW) operates across three main segments: packaging and specialty plastics, industrial intermediates and infrastructure, and performance materials and coatings. Like other businesses in commodity-driven industries, such as oil and gas or gold mining, the company cannot control commodity prices. Instead, it focuses on managing costs to produce its products as efficiently as possible. However, the company faces challenges from a global slowdown affecting commodity and specialty chemical companies, petrochemical firms, and refiners. Many major refining companies have lost earlier gains, and other chemical companies have also seen their stock values decline. The stock is down by over 29% since the start of 2024.

Due to these challenges, the company posted mixed earnings. In the third quarter of 2024, Dow Inc. (NYSE:DOW) reported revenue of $10.88 billion, up 1.4% from the same period last year. Volume grew by 1% compared to the prior-year period, with the increase driven by gains in Performance Materials & Coatings. Operating cash flow was $800 million, a decrease of $858 million year-over-year. This decline was mainly due to higher inventory levels needed to support sales growth, as well as labor-related supply chain disruptions. Its free cash flow also declined to $64 million, compared with $1.06 billion in the same quarter last year.

Despite these setbacks, Dow Inc. (NYSE:DOW) continues to be an excellent option for income-focused investors due to its strong dividend offerings. In the most recent quarter, it returned $490 million to shareholders through dividends. Moreover, the company has never missed a dividend payment since 1912. Currently, it offers a quarterly dividend of $0.70 per share and has a dividend yield of 7.16%, as of December 19.

According to Insider Monkey’s database of Q3 2024, 31 hedge funds owned stakes in Dow Inc. (NYSE:DOW), compared with 32 in the previous quarter. The overall value of these stakes is more than $1.2 billion.