With uncertainty running high amid a return of volatility, the case for the best Dow dividend stocks is as strong as ever.
If the past month of market action underscores anything,
it's that big, blue-chip dividend stocks never go out of style. And that's
particularly true for the bluest of blue-chip equity-income vehicles – the top
Dow dividend stocks.
The Dow Jones Industrial Average, that elite bastion of 30
industry leading companies, is a haven for reliable dividend payers. Only one
of its components – Salesforce.com (CRM) – doesn't pay a dividend at all.
And although long-time dividend machines Boeing (BA) and
Walt Disney (DIS) have temporarily suspended their payouts in response to the
COVID-19 crisis, the Dow remains a fountain of reliable and growing dividends.
Indeed, a number of Dow dividend stocks are members of the S&P 500 Dividend
Aristocrats, a list of companies that have increased their payouts annually for
at least 25 consecutive years.
The Dow's dividend-heavy character helped it hold up better
than the benchmark S&P 500 since the latter peaked out at a record close on
Sept. 2. With uncertainty running high amid a return of volatility, the case
for Dow dividend stocks is as strong as ever.
"Dividend strategies have gained a foothold with market
participants seeking potential outperformance and attractive yields, especially
in the even lower-rate environment we've seen since early 2020 as the world
deals with the economic fallout from COVID-19," notes Tianyin Cheng,
senior director of Strategy Indices at S&P Dow Jones Indices. "Stocks
with a history of dividend growth could present a compelling investment
opportunity in an uncertain environment."
Given that reality, we screened the blue-chip average for
analysts' highest-rated Dow dividend stocks.
Here's how the process works: S&P Global Market
Intelligence surveys analysts' stock ratings and scores them on a five-point
scale, where 1.0 equals Strong Buy and 5.0 means Strong Sell. Any score of 2.5
or lower means that analysts, on average, rate the stock a Buy. The closer the
score gets to 1.0, the stronger the Buy call.
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