BOSTON ( TheStreet) -- Investors who want to stick with equities despite the downturn will be rewarded as much as 6% in Dow dividends. A total of 22 of the 30 companies in the Dow Jones Industrial Average are now yielding more than 10-year U.S. Treasuries.
The market selloff is boosting dividend yields on many stocks. At the same time, brisk buying of U.S. Treasuries following the S&P downgrade of the U.S. credit rating has dropped the yield on the 10-year Treasury to only 2.37%. While rates are expected to increase at some point, many investors are noting the value that can be had in large-cap U.S. stocks with outsized dividends.
|Find Dividend Stocks, Funds and ETFs >>|
One of those professional investors is Bill Stone, chief investment strategist at PNC Asset Management Group. In a research note Monday, Stone advocates an allocation to dividend-focused stocks within the U.S. large-cap stock group, as he says this "should effectively lower some volatility in the portfolio while providing the opportunity to add some income and risk-adjusted performance." "This allocation (using the Dow Jones U.S. Select Dividend Index as a proxy) has performed as we had hoped and has outperformed the S&P 500 both year-to-date and in periods like last week," Stone writes. U.S. indices fell upwards of 7% last week before Monday's selloff. Stone remains positive regarding stocks relative to bonds and cash, and he says he views the current pullback as an opportunity to buy. While Stone doesn't offer specific equities, TheStreet has parsed the full list of Dow components and ranked them by dividend yield.
- AT&T (T) -- 6%
- Verizon (VZ) -- 5.7%
- Merck (MRK) -- 4.9%
- Pfizer (PFE) -- 4.7%
- Intel (INTC) -- 4%
- General Electric (GE) -- 3.8%
- Johnson & Johnson (JNJ) -- 3.7%
- DuPont (DD) -- 3.6%
- Procter & Gamble (PG) -- 3.4%
- Kraft Foods (KFT) -- 3.4%
- Home Depot (HD) -- 3.4%
- Chevron (CVX) -- 3.3%
- Travelers (TRV) -- 3.2%
- McDonald's (MCD) -- 2.9%
- Wal-Mart (WMT) -- 2.9%
- JPMorgan Chase (JPM) -- 2.8%
- Coca-Cola (KO) -- 2.8%
- Boeing (BA) -- 2.7%
- 3M (MMM) -- 2.7%
- United Technologies (UTX) -- 2.6%
- Exxon Mobil (XOM) -- 2.6%
- Microsoft (MSFT) -- 2.6%
- 10-Year U.S. Treasury -- 2.37%
- Caterpillar (CAT) -- 2.1%
- IBM (IBM) -- 1.8%
- Cisco Systems (CSCO) -- 1.7%
- American Express (AXP) -- 1.6%
- Hewlett-Packard (HPQ) -- 1.5%
- Walt Disney (DIS) -- 1.2%
- Alcoa (AA) -- 1%
- Bank of America (BAC) -- 0.6%
>To contact the writer of this article, click here: Robert Holmes. >To follow Robert Holmes on Twitter, go to http://twitter.com/RobTheStreet. >To submit a news tip, send an email to: firstname.lastname@example.org.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV