The ‘Dogs of the Dow’ is a well-known strategy first published in 1991 by Michael Higgins. The plan seeks to maximize the yield of investments by buying the ten highest-paying dividend stocks available from the Dow Jones Industrial Average each year. The highest-yielding stocks are also the lowest-priced stocks in the venerable average, as the lower a stock (or bond) goes in price, the higher the attached yield or coupon becomes.
With the Nasdaq up 43% and the S&P 500 up 24.2% in 2023, investors trying to play catch-up on the big tech giants that have been driving the market rally may get trying to pick up nickels in front of a bulldozer as the lion’s share of the big money has been made.
Here are the current five highest-yielding “Dogs of the Dow” for 2024 listed in order of the highest yield. While all are rated Buy across Wall Street, it is essential to remember that no single analyst report should be used as the sole basis for any buying or selling decision.
3M
This is a top company that could jump with continued economic pick-up, and the shares are down big this year while paying investors a 6.32% dividend. 3M Company (NYSE: MMM) provides diversified technology services in the United States and internationally.
The company operates through four segments:
- Safety and Industrial
- Transportation and Electronics
- Health Care
- Consumer
The Safety and Industrial segment offers:
- Industrial abrasives and finishing for metalworking applications
- Auto body repair solutions; closure systems for personal hygiene products
- Masking, and packaging materials
- Electrical products and materials for construction and maintenance
- Power distribution
- Electrical original equipment manufacturers
- Structural adhesives and tapes
- Respiratory
- Hearing, eye, and fall protection solutions
- Natural and color-coated mineral granules for shingles
The Transportation and Electronics segment provides:
- Ceramic solutions
- Attachment tapes
- Films, sound, and temperature management for vehicles
- Premium large format graphic films for advertising
- Fleet signage
- Light management films and electronics assembly solutions
- Packaging and interconnection solutions
- Reflective signage for highway, and vehicle safety
The Healthcare segment offers:
- Healthcare procedure coding and reimbursement software
- Skin, wound care, and infection prevention products and solutions
- Dentistry and orthodontic solutions
- Filtration and purification systems
The Consumer segment provides:
- Consumer bandages, braces, supports, and consumer respirators
- Cleaning products for the home
- Retail abrasives
- Paint accessories
- Car care DIY products
- Picture hanging
- Consumer air quality solutions
- Stationery products
Verizon Communications
This top telecommunications company offers tremendous value while paying a hefty 6.31% dividend. Verizon Communications, Inc (NYSE: VZ) is one of the largest US telecom companies. It provides wireless and wireline service to retail, enterprise and wholesale customers.
The company’s wireless network serves approximately 120 million mobile connections with 115 million postpaid subscribers. Verizon’s wireline business has undergone a period of secular decline due to wireless substitution and cable competition.
Verizon also provides:
- Converged communications
- Information, and entertainment services over America’s most advanced fiber-optic network and delivers integrated business solutions to customers worldwide
Verizon and the other big telecom giants have been mauled over concerns over lead phone lines, and while this could keep a lid on the stock in the near-term many feel it’s the best buying opportunity in years.
Dow
This company was spun out from Dupont in 2019 and offers investors growth, income potential, and a big 5.42% dividend. Dow Inc. (NYSE: DOW) is a leading materials science company formed due to the merger of Dow and DuPont in 2017 and subsequent spin in 2019.
The company is organized into three principal divisions of:
- Performance Materials & Coatings
- Industrial Intermediates & Infrastructure
- Packaging & Specialty Plastics
The Company’s segments include Agricultural Sciences, which provides crop protection and seed/plant biotechnology products and technologies, urban pest management solutions and healthy oils.
Consumer Solutions, which consists of Consumer Care, Dow Automotive Systems, Dow Electronic Materials and Consumer Solutions-Silicones businesses;
Infrastructure Solutions, which consists of:
- Dow Building & Construction
- Dow Coating Materials
- Energy & Water Solutions
- Performance Monomers and Infrastructure Solutions-Silicones businesses
Performance Materials & Chemicals, which consists of:
- Chlor-Alkali and Vinyl
- Industrial Solutions and Polyurethanes businesses
- Performance Plastics, which consists of Dow Elastomers, Dow Electrical and Telecommunications, Dow Packaging and Specialty Plastics, Energy and Hydrocarbons businesses
Walgreens Boots Alliance
This huge drugstore chain cut the dividend recently but still pays a solid 4.42% yield. Walgreens Boots Alliance (NYSE: WBA) is a pharmacy-led health and beauty retail company.
It operates through three segments:
- Retail Pharmacy USA
- Retail Pharmacy International
- Pharmaceutical Wholesale
The Retail Pharmacy USA segment sells prescription drugs and various retail products, including :
- Health, wellness, beauty, personal care, consumable, and general merchandise, through its retail drugstores.
- It also provides specialty pharmacy and mail services; this segment operates nearly 10,000 retail stores under the Walgreens and Duane Reade brands in the United States and six specialty pharmacies.
The Retail Pharmacy International segment sells prescription drugs; and health and wellness, beauty, personal care, and other consumer products through its pharmacy-led health and beauty stores and optical practices, as well as through boots.com and an integrated mobile application.
This segment operated 4,428 retail stores under the Boots, Benavides, and Ahumada in the United Kingdom, Thailand, Norway, the Republic of Ireland, the Netherlands, Mexico, and Chile; and 550 optical practices, including 165 on a franchise basis.
The Pharmaceutical Wholesale segment sells and distributes specialty and generic pharmaceuticals, health and beauty products, and home healthcare supplies and equipment.
Chevron
This integrated giant is a safer way for investors looking to get positioned in the energy sector and pays a rich 4.05% dividend . Chevron Corporation (NYSE: CVX) through its subsidiaries, engages in integrated energy and chemicals operations worldwide.
The company operates in two segments:
- Upstream and Downstream
The Upstream segment is involved in the:
- Exploration, development, production, and transportation of crude oil and natural gas
- Processing, liquefaction, transportation, and regasification associated with liquefied natural gas
- Transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as operates a gas-to-liquids plant
The Downstream segment engages in:
- Refining crude oil into petroleum products
- Marketing crude oil, refined products, and lubricants
- Manufacturing and marketing of renewable fuels
- Transporting crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car
- Manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives
It is also involved in cash management and debt financing activities, insurance operations; real estate activities, and technology businesses.
Chevron Corporation announced last fall that it has entered into a definitive agreement with Hess Corporation (NYSE: HES) to acquire all of the outstanding shares of Hess in an all-stock transaction valued at $53 billion, or $171 per share based on Chevron’s closing price on October 20, 2023. Under the terms of the agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. The transaction’s total enterprise value, including debt, is $60 billion.
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