The 10 Best Dividend Stocks in the Dow Jones Industrial Average

best dividend stocks

Investors currently have a chance to pick up some of the best dividend stocks by looking at those in the Dow Jones Industrial Average.   

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The Dow's current dividend yield is 2.19%, better than the S&P 500's current yield of 1.9% and well above the near-zero interest paid on money market and savings accounts.

The 10 dividend stocks listed below are among the best in the Dow. They all offer modest valuations and hearty yields, as well as the potential for capital appreciation based on forward earnings estimates. Many have a price-earnings ratio (P/E) below the Dow's average 16.18 and below its historical average of 15.

Take a look.

10 Best Dividend Stocks in the Dow

Travelers Companies Inc. (NYSE: TRV), an insurance giant founded in 1853, was added to the Dow in June 2009. The stock trades at a modest P/E of 9.57 and has a dividend yield of 2.32%. The company has raised dividends every year for the last five. TRV is projected to report earnings per share (EPS) of $9.26 in fiscal 2015, up from this year's forecast of $9.19.

Best Dividend StocksJPMorgan Chase & Co. (NYSE: JPM) is the largest U.S. bank by assets and the country's only bank in the top 10 ranking of largest banks in the world (no. 6). Founded in 1799, the storied bank was added to the Dow in May 1991. The stock trades at a P/E of 15.39 and carries an appealing 2.69% dividend yield. The bank has boosted dividends annually since 2011. JPM is expected to report EPS of $5.99 for FY2015, up from forecasts of $5.52 for 2014.

International Business Machines Corp. (NYSE: IBM) has been revered through its lucrative history, with roots dating back to the 1880s, as one of the world's largest computer companies and systems integrators. IBM holds more patents than any other U.S.-based tech company. Big Blue was a Dow member from 1932 through 1939 and was added again in June 1979. IBM is expected to post EPS of $19.84 in fiscal 2015, up from $17.90 in 2014. Shares trade at a modest P/E of 12 and boast an attractive quarterly dividend of $1.10 per share for a 2.3% yield. Dividends have increased every year for the last 14.

AT&T Inc. (NYSE: T) became a Dow member in November 1999. The telecommunications titan has a P/E of 10.7 and dividend yield of 5.31%. The company's dividend payout ratio is 70.5% for an annual distribution of $1.84 per share. Dividends have increased without interruption for the last 29 years. AT&T is expected to report FY2015 EPS of $8.22, up from $7.46 in 2014.

Chevron Corp. (NYSE: CVX) is an energy giant with operations worldwide. CVX was a Dow member from 1930 through 1999 and has held a place in the benchmark since February 2008. Shares trade at a P/E of 12.28 and offer a dividend yield of 3.33%. Dividends have been raised annually for the last 28 years. The company is expected to report EPS of $11.38 in 2015, up from forecasts of $10.79 this year.

Cisco Systems Inc. (Nasdaq: CSCO) was added to the Dow on June 8, 2009. The tech giant trades at a P/E of 16.63 and carries a dividend yield of 3.06%. EPS for 2015 are expected to come in at $2.22, up from the projected $2.09 this year. Dividends have been boosted annually since 2011. CSCO is sitting on some $47 billion in cash, suggesting that more dividend hikes can be expected.

Exxon Mobil Corp. (NYSE: XOM) became a Dow member in January 1928, when it was known as Standard Oil of New Jersey. The oil and natural gas titan trades at a P/E of 12.68 and boasts a dividend yield of 2.77%. Dividends have been sweetened every year since 1983. Exxon is expected to report FY2015 EPS of $7.88, up from $7.76 in 2014.

General Electric Co. (NYSE: GE) has been a Dow member since November 1907. The power giant, with a market cap of $260 billion, trades at a P/E of 17.78. The company's dividend payout ratio is 52.7%. GE's annual distribution amount is $0.88 per share for an attractive 3.37% yield. Analysts expect GE to post EPS of $1.83 in 2015, up from $1.68 this year.

Pfizer Inc. (NYSE: PFE) was added to the Dow in April 2004. The pharmaceutical giant trades at a P/E of 18.65 - a bit higher than others on this list, but its prospects look strong. The company continues to grow organically and through acquisitions. PFE is expected to post EPS of $2.26 in 2015, up from $2.22 in 2014. Its annual dividend payout is $1.04 a share for a 3.54% yield. The company has been boosting dividends every year since 2010.

Verizon Communications Inc. (NYSE: VZ) was added to the Dow in April 2004. The telecommunications behemoth has a P/E of 10.5 and a dividend yield of 4.29%. Dividends have been rising annually since 2007. FY2015 EPS are projected to come in at $3.88, up from $3.52 in 2014.

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