Top 10 Dow Jones Stocks with best dividends for successful long-term investors
Before delving into an analysis of the top 10 Dow Jones stocks with best dividends, it’s crucial to grasp the origins of this index.
The Dow Jones Index, which traces its roots back to Dow Jones Indices LLC, was established in 1882 by American journalists Charles Dow and Edward Jones. Initially, the index comprised a mere 12 steadfast companies from that era.
Over time, it expanded to 20 in 1916 and finally settled at 30 in 1928. Remarkably, it stands as the oldest stock index in existence.
The Dow Jones is a composite of 30 stocks that are calculated using a weighted average, and its value varies based on the performance of its constituent companies. Put simply, if a majority of the stocks comprising the Dow Jones experience declines in the stock market, the index may fall accordingly. Conversely, if most of the component stocks rise, the index climbs.
To clarify further, the Dow Jones is a stock index comprised of the 30 largest companies, determined by their market capitalisation, listed on the New York Stock Exchange (NYSE). However, it excludes transportation and public service companies. These included stocks are commonly referred to as “blue chips.”
Top 10 Dow Jones stocks with best dividends
As we mentioned earlier, the Dow Jones is a prominent global index. Nearly all of the 30 stocks within the Dow Jones Industrial Average offer dividends, although not all of them boast exceptionally high dividend yields.
Out of the 30 stocks, 10 stocks yield 3% or higher. Considering the Dow’s selectivity, it serves as an excellent resource for investors seeking “Dividend Aristocrats” (stocks that have consistently increased dividends for at least 25 consecutive years) or high-dividend blue-chip stocks.
The year 2022 has undeniably presented challenges for the stock market, with several major indices experiencing double-digit losses. Consequently, many components have seen their dividend yields rise as prices dropped, creating potential opportunities for investors.
Out of the 30 components comprising the Dow Jones, 27 stocks currently pay dividends. The three exceptions are Boeing Co (NYSE: BA), Walt Disney Co (NYSE: DIS), and Salesforce Inc (NYSE: CRM). The average dividend payout for the Dow Jones components stands at over 2.8%, with the top four stocks offering a dividend yield of 5% or more.
Without further ado, let’s explore the Dow’s highest dividend-paying stocks:
| Company | Dividend yield |
| Verizon (VZ) | 7.67% |
| Walgreens Boots Alliance (WBA) | 6.58% |
| 3M (MMM) | 5.87% |
| Dow Inc (DOW). | 5.29% |
| International Business Machines (IBM) | 4.98% |
| Chevron Corp. (CVX) | 3.93% |
| Amgen (AMGN) | 3.75% |
| Cisco Systems (CSCO) | 3.10% |
| Goldman Sachs Group (GS) | 3.07% |
| Coca-Cola Co (KO) | 3.02% |
| Johnson & Johnson | 2.98% |
Similar to the index itself, the highest dividend-paying stocks in the Dow are renowned, well-established American companies. A significant number of them have a history spanning over 100 years.
However, it’s important to note that while these companies have illustrious backgrounds, some may have already experienced their prime days. Certain stocks exhibit remarkably high dividend payout ratios, indicating that they are presently allocating a substantial portion of their cash to shareholders instead of reinvesting in their own business ventures for future growth.
Top 5 best Dow Jones stocks for dividend payout ratio
The dividend payout ratio indicates the amount of dividends paid to shareholders compared to the net income of the company. In other words, the higher the ratio, the more money shareholders receive from the company’s net income.
| Name | Dividend Payout Ratio |
| Amgen | 57.92% |
| Merck | 57.03% |
| Caterpillar | 35.48% |
| Travelers Cos | 34.10% |
| Chevron | 32.61% |
Top 5 best Dow Jones stocks for 3-year profitability
| Name | 3-Year Average |
| Apple | 25.99% |
| Chevron | 25.52% |
| Caterpillar | 24.48% |
| American Express | 23.08% |
| Microsoft Corporation | 19.70% |
Apple
Founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne, Apple initially aimed to sell the first personal computer, the Apple I. Headquartered in Cupertino, California, Apple has grown to become the largest technology company in terms of revenue and the second-largest producer of mobile phones.
Chevron
Established in 1870, Chevron is an American multinational energy company. It has experienced rapid growth through collaborations with companies like Texaco. Today, Chevron operates across all sectors of oil and natural gas, including exploration, production, refining, marketing, transportation, chemical production, and energy generation.
Caterpillar
Caterpillar is the global leader in the manufacturing of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives.
The company operates under various brands, including Cat, Cat Financial, Cat Reman, and several specialised brands. Caterpillar is often referred to as a blue chip stock.
American Express
American Express, commonly known as Amex, is a financial services company founded in 1850. It is renowned for its credit card, charge card, and traveller’s cheque businesses.
Over the years, American Express has expanded its offerings to include a wide range of financial services, including banking, insurance, and travel services.
Microsoft Corporation
Microsoft Corporation, founded in 1975 by Bill Gates and Paul Allen, is a global technology company headquartered in Redmond, Washington. Microsoft is widely recognised for its software products, including the Windows operating system, Microsoft Office suite, and cloud computing services through its Azure platform.
The company has diversified its business to include hardware devices such as Xbox gaming consoles and Surface tablets.
Where to buy Dow Jones stocks
Interactive Brokers
| Advantages of Investing with Interactive Brokers |
| Intuitive platform |
| Many stocks, funds, and other assets to invest in |
| £0 minimum deposit |
| Competitive prices |
Interactive Brokers is one of the best brokers to buy Dow Jones stocks for several reasons. First of all, Interactive Brokers offers an efficient and reliable trading platform, which allows investors to execute orders quickly and accurately. The platform offers real stocks, but also CFDs, futures, and options, along with other assets for diversification purposes.
In addition, Interactive Brokers’ proprietary platform is beginner-friendly and easy to use. The costs are highly competitive: there is no minimum deposit and you have one free withdrawal per month. For more information about costs and features, check out our Interactive Brokers review.
Finally, Interactive Brokers offers excellent customer service to get assistance with any query you may have.
Top 5 best Dow Jones stocks for 1-Year returns
| Title | 1-Year Profitability | |
| 1 | Boeing | 50.72% |
| 2 | Caterpillar | 47.12% |
| 3 | Salesforce | 40.88% |
| 4 | Microsoft | 35.59% |
| 5 | JP Morgan Chase | 33.09% |
Boeing
Boeing is a prominent aerospace company that was founded in 1916. It has a rich history in the aviation industry and is known for manufacturing commercial aeroplanes, defence systems, and space technology.
Boeing has been a significant player in shaping the global aerospace landscape and continues to innovate in the field. While it has faced challenges in recent years, Boeing remains a key component of the Dow Jones index.
Caterpillar
As mentioned earlier, Caterpillar is the global leader in the production of construction and mining equipment, engines, gas turbines, and locomotives.
With its extensive product portfolio and strong market presence, Caterpillar has established itself as a reliable player in the industry. The company’s performance and consistent growth have contributed to its inclusion in the Dow Jones index.
Salesforce
Salesforce is a renowned American cloud-based software company that offers a wide range of customer relationship management (CRM) solutions. Founded in 1999, Salesforce has revolutionised the CRM industry with its innovative approach and cutting-edge technology.
The company’s software-as-a-service (SaaS) platform has gained significant popularity among businesses of all sizes, making Salesforce a prominent player in the technology sector.
Microsoft
Microsoft Corporation, founded in 1975, is a global technology company known for its software products, including the Windows operating system, Microsoft Office suite, and cloud computing services.
Microsoft’s strategic expansion into various technology domains has ensured its relevance and success in the rapidly evolving digital landscape. With a strong market presence and consistent growth, Microsoft remains one of the leading companies within the Dow Jones index.
JPMorgan Chase
JPMorgan Chase, a multinational investment bank and financial services provider, is a key player in the banking sector. With a history dating back to 1799, JPMorgan Chase has evolved into one of the largest banks in the United States.
The company offers a comprehensive range of financial services, including asset management, investment banking, and retail banking. JPMorgan Chase’s enduring presence and solid financial performance have contributed to its inclusion in the Dow Jones index.
Worst Dow Jones stocks based on profitability in the last year
Here is a rundown of the five worst-performing Dow stocks so far this year:
| Company | Last Year Performance |
| Verizon | -31.39% |
| Walgreens Boots Alliance | -20.14% |
| 3M | -19.85% |
| UnitedHealth | -10.79% |
| Johnson & Johnson | -9.47% |
Check out other recommended stock market articles
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- Dividend investing
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Dow Jones stocks with best dividends: summary
In conclusion, for individuals seeking to invest in American stocks, one strategy worth considering is to explore the Dow Jones index. As mentioned previously, the index comprises 30 of the largest publicly traded companies in the United States, providing a representative snapshot of the American economy.
By purchasing shares of companies included in the Dow Jones index, investors can gain broad exposure to the American stock market, enabling them to participate in the performance of various sectors and industries across the nation. It serves as a convenient avenue for those seeking a diversified investment approach within the U.S. stock market.
FAQ
How can I determine which Dow Jones stocks are suitable for long-term investment?
When considering long-term investments within the Dow Jones, it is essential to conduct thorough research and analysis. Factors to evaluate include the company’s financial health, historical performance, growth prospects, industry trends, and dividend history.
Are the dividend yields of Dow Jones stocks stable over time?
The dividend yields of Dow Jones stocks can vary over time due to several factors. Market conditions, company performance, and dividend policy changes can impact yields.
How can I invest in Dow Jones stocks?
There are multiple ways to invest in Dow Jones stocks. One common approach is to open a brokerage account with a reputable financial institution or online brokerage platform. This allows individuals to buy and sell shares of Dow Jones stocks through the stock market.
