3 Top Dow Dividend Stocks in 2010

2010 has been fairly disappointing to investors following the huge market gains experienced in 2009. Sure the Dow Jones index is only down 1% for the year, but 18 of the 30 Dow components have posted losses in 2010. Standout performers from 2009, like Alcoa and Microsoft, have delivered horrible returns to investors this year.


Fortunately, the top Dow dividend stocks have outperformed the broader market. As we have pointed out before, the top Dow dividend stocks don’t necessarily include the highest yielding stocks like Verizon or AT&T.


Verizon’s 6.9% yield makes it the highest yielding stock in the Dow, but VZ shares have fallen 13% in 2010. Similarly, AT&T yields 6.8%, but the stock’s 10% drop this year has erased any dividend gains.


Verizon and AT&T both have stagnant businesses that don’t inspire investor interest. The companies then further hurt their stock prices by engaging in a costly marketing campaign against each other. However, if you look beyond those two telecom stocks you can find 3 top Dow dividend stocks that have shined in 2010.



DuPont is now the fourth highest yielding stock in the Dow index with a 4.5% dividend yield. Investors in DD have been able to capture not only a healthy dividend, but also some impressive capital gains. DuPont’s stock has gained nearly 11% in 2010 as revenue surged 23% in the first quarter. DuPont also has a tremendous history of increasing their dividend payout.   



McDonald’s has been our top Dow dividend stock pick this year. We believe that MCD is the safest Dow dividend stock and still yields an impressive 3.4%. Like Dupont, investors can count on more than just dividend checks with this stock. McDonald’s shares have already gained 12% in 2010. The stock has shrugged off the recent market selloff and is now trading near its 52-week high.



After being one of the worst performing stocks in 2008, Boeing bounced back last year to post a nice 27% gain. However, their performance in 2010 has been even more impressive. The stock has surged 23% since the beginning of the year and many analysts believe this is just the beginning of an up cycle for Boeing. Wall Street is expecting earnings to grow 25% next year. In addition to the strong growth prospects, Boeing also rewards investors with a 2.7% dividend yield.


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