In this article, we discuss 13 best Dow Jones dividend stocks according to analysts. You can skip our detailed analysis of dividend stocks in the Dow and their performance over the years, and go directly to read 5 Best Dow Jones Dividend Stocks According to Analysts.
Investors have employed various dividend strategies over time to enhance their returns. Looking back at history, it's evident that dividend-paying stocks have often outperformed other types of investments. Opting for dividend stocks from the Dow Jones Industrial Average (DJIA) can be particularly advantageous. This index comprises numerous dividend-paying stocks, notably blue-chip companies renowned for their consistent dividend increases. In 2023, the DJIA saw a significant increase of 14%, with 19 component stocks experiencing gains while 11 component stocks faced declines over the course of the year. Towards the end of the year, in December, the index reached a record-breaking high, surpassing the $37,000 mark.
Apart from delivering robust returns over the years, dividends have also maintained their significance as a growing component of personal income. As per a report from S&P Dow Jones Indices, the proportion of personal income attributed to dividend earnings has consistently risen over time, underscoring their importance as a source of income. In 2012, dividend income accounted for 5.64% of per capita personal income in the U.S., compared to 4.39% in the previous decade and 3.51% two decades prior. Conversely, during this same period, interest income from capital markets has steadily declined, dropping to 7.39% in 2012 from 13.51% in 1992. According to the report, the total dividend income, adjusted for inflation to $2000, experienced a substantial rise from $187.6 billion in 1992 to $757 billion in 2012, marking an impressive growth of over 300%. In contrast, interest income grew by less than 100% over the same period.
When investors consider dividend stocks for their portfolios, they often prioritize dividend yields. However, it's important to note that companies offering high yields but lacking solid financial stability could face the risk of reducing dividends, especially amidst global economic uncertainties and increasing interest rates. Therefore, investment strategies aimed at high yields should also prioritize the quality and stability of the companies in question. The Dow Jones Dividend 100 Index Series tracks the performance of 100 high-dividend-yielding stocks within each covered market, chosen for their consistent dividend payments and strong fundamental strength. When utilizing any income strategy, market participants typically prioritize both yield and capital gain. The Dow Jones Dividend 100 Indices have demonstrated superior yields and comparable capital gains over the long term when compared to their respective benchmarks. According to a report by S&P Dow Jones Indices, for the period spanning from June 30, 2001, to June 30, 2023, the total return of the Dow Jones U.S. Dividend 100 Index, which assumes theoretical reinvestment of dividends, averaged 11.7% annually. This performance outpaced its benchmark, the Dow Jones U.S. Broad Stock Market Index, which achieved a 10.2% return over the same period.
Verizon Communications Inc. (NYSE:VZ), 3M Company (NYSE:MMM), and Dow Inc. (NYSE:DOW) are some of the most prominent dividend stocks in the DJIA. In this article, we discuss some of the best dividend stocks from the Dow according to analysts.
13 Best Dow Jones Dividend Stocks According to Analysts
Our Methodology:
For this list, we started with the 30 stocks in the Dow Jones Industrial Average and selected dividend-paying stocks from that group. We then narrowed it down to 13 dividend stocks with a projected upside potential of over 8% based on analyst price targets. The stocks are ranked according to their upside potential, as of February 22. We have also mentioned hedge fund sentiment for these stocks. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
The Walt Disney Company (NYSE:DIS) is a multinational entertainment conglomerate. It is a prominent player in the global entertainment industry, known for its diversified portfolio of brands, intellectual properties, and entertainment offerings. The company reinstated its dividends in November 2023 after ceasing its payouts for nearly three years after the pandemic. On February 8, the company declared a 50% hike in its quarterly dividend to $0.45 per share. The stock has a dividend yield of 0.70%, as of February 22. It is among the best dividend stocks on our list from Dow.
At the end of Q4 2023, 89 hedge funds tracked by Insider Monkey reported having stakes in The Walt Disney Company (NYSE:DIS), which remained unchanged from the previous quarter. The consolidated value of these stakes is nearly $7.4 billion. With over 32.3 million shares, Trian Partners was the company's leading stakeholder in Q4.
Verizon Communications Inc. (NYSE:VZ) is a multinational telecommunications company that provides communications, information, and entertainment products and services to consumers, businesses, and governmental entities. The company pays a quarterly dividend of $0.665 per share and has a dividend yield of 6.47%, as of February 22. It has been growing its dividends for the past 17 consecutive years. With an upside potential of 9.08%, VZ is one of the best dividend stocks in the Dow.
The number of hedge funds tracked by Insider Monkey owning stakes in Verizon Communications Inc. (NYSE:VZ) grew to 63 in Q4 2023, from 61 in the previous quarter. The consolidated value of these stakes is over $2.63 billion.
Visa Inc. (NYSE:V) is a global payments technology company that facilitates electronic funds transfers throughout the world. Visa operates one of the largest retail electronic payment networks globally, connecting millions of merchants, financial institutions, governments, and consumers. On January 25, the company announced a quarterly dividend of $0.52 per share, which was in line with its previous dividend. The company holds a 15-year streak of consistent dividend growth, which makes V one of the best dividend stocks on our list. The stock's dividend yield on February 22 came in at 0.75%.
As of the end of Q4 2023, 162 hedge funds in Insider Monkey's database reported having stakes in Visa Inc. (NYSE:V), compared with 167 in the preceding quarter. The total worth of these stakes is more than $26.5 billion. Among these hedge funds, TCI Fund Management was the company's leading stakeholder in Q4.
The Goldman Sachs Group, Inc. (NYSE:GS) is a leading global investment banking, securities, and investment management firm. The company provides a wide range of investment banking services to corporations, financial institutions, governments, and individuals. The company pays a quarterly dividend of $2.75 per share and has a dividend yield of 2.83%, as of February 22. It is among the best dividend stocks in the Dow with an upside potential of 9.84%.
Insider Monkey's database of Q4 2023 indicated that 69 hedge funds owned stakes in The Goldman Sachs Group, Inc. (NYSE:GS), up from 68 in the previous quarter. The collective value of these stakes is over $6.33 billion.
Amgen Inc. (NASDAQ:AMGN) is a multinational biopharmaceutical company that focuses on the development, manufacturing, and commercialization of therapeutics for serious illnesses. In December 2023, the company declared a 5.6% hike in its quarterly dividend to $2.25 per share. This marked the company's 11th consecutive annual dividend hike, which makes AMGN one of the best dividend stocks on our list. As of February 22, the stock has a dividend yield of 3.18%.
Amgen Inc. (NASDAQ:AMGN) ended Q4 2023 with 69 hedge fund positions, up from 60 in the previous quarter, as per Insider Monkey's database. The stakes owned by these hedge funds have a collective value of roughly $1.8 billion. With over 1.15 million shares, Two Sigma Advisors was the company's leading stakeholder in Q4.
An American multinational fast-food chain, McDonald's Corporation (NYSE:MCD) is next on our list of the best dividend stocks from the Dow. The company has been rewarding shareholders with growing dividends for the past 47 consecutive years and currently pays a quarterly dividend of $1.67 per share. As of February 22, the stock has a dividend yield of 2.27%.
At the end of December 2023, 63 hedge funds tracked by Insider Monkey reported owning stakes in McDonald's Corporation (NYSE:MCD), down from 70 in the preceding quarter. The consolidated value of these stakes is over $2.09 billion.
Johnson & Johnson (NYSE:JNJ) is a multinational corporation that operates in the healthcare industry, focusing on pharmaceuticals, medical devices, and consumer health products. According to analysts, the stock has an upside potential of 11.97%, which makes it one of the best dividend stocks in the Dow. In addition to this, the company has been growing its dividends for the past 61 years. Currently, it pays a quarterly dividend of $1.19 per share and has a dividend yield of 3.00%, as of February 22.
As of the end of Q4 2023, 81 hedge funds in Insider Monkey's database owned investments in Johnson & Johnson (NYSE:JNJ), compared with 84 in the preceding quarter. The consolidated value of these stakes is roughly $4 billion. Ken Fisher's Fisher Asset Management owned the largest stake in the company in Q4.
Chevron Corporation (NYSE:CVX) ranks sixth on our list of the best dividend stocks in the Dow. The American energy company holds an impressive 37-year streak of consistent dividend growth and it currently pays a quarterly dividend of $1.63 per share. As of February 22, the stock offers a dividend yield of 4.19%.
According to Insider Monkey's database of Q4 2023, 71 hedge funds held stakes in Chevron Corporation (NYSE:CVX), down slightly from 72 in the previous quarter. The overall value of these stakes is over $21.6 billion. Warren Buffett's Berkshire Hathaway was the largest stakeholder of the company, owning over 126 million shares.
