The 12 Highest-Yielding Dow Stocks
Believe it or not, there are a dozen stocks that are components of the Dow Jones Industrial Average index and also provide yields of more than 2.5%.
While it's nice to own a blue-chip stock, it's better to own a blue chip with a high yield -- and it's best when the stock is also owned by professional investors who agree with your shareholdings.
With that in mind, we have set up a portfolio of
on Stockpickr.com.
The highest-yielding Dow stock is
Pfizer
(PFE) - Get Report
, which offers a yield of 4.5% and has been paying
dividends for 25 years. Unfortunately, the drugmaker has been suffering because of competition from generic Zocor against its drug Lipitor. However, the company's problems haven't scared all investors from the stock.
Noted value investor
owns the stock. Dreman is one of the greats, and his large-cap fund's returns, 17% annually since inception, demonstrate it. His fund's Web site states: "We believe that the markets are not perfectly efficient and that, in particular, behavioral finance plays a considerable role in investor actions and over-reactions and subsequently in stock price movements." That could be his view on Pfizer.
Another Pfizer believer is
, a closed-end fund that has generated a three-year average annual return of 10.9%. Adams also owns a few other high-yield stocks, such as
Bank of America
(BAC) - Get Report
, which pays 4.4%, and
Wachovia
(WB) - Get Report
, at 4.2%.
Pfizer is also listed on Stockpickr's portfolio of
Diabetes-Related Drug Companies
, which lists the stocks involved in diabetes- and insulin-related drugs. This diabetes portfolio also lists another high-yield pharma stock,
GlaxoSmithKline
(GSK) - Get Report
, which pays 3.7%.
To watch Alix Steel's video take of this column, click here
.
Altria
(MO) - Get Report
is next on the list. This Dow component offers a 4% yield. Now that the company is free of
Kraft
(KFT)
, it is primarily a cigarette manufacturer.
Altria appears in 5,454 different portfolios on Stockpickr.com. It is also a component of the
portfolio, which features the 20 largest capitalization stocks. This group also includes such other dividend-payers as
Exxon Mobil
(XOM) - Get Report
, which pays 1.7%, and
General Electric
(GE) - Get Report
, which has a 3% yield.
Most notable, however, is that Altria is owned by
from Caxton Associates. Caxton is a $16 billion trading and investment firm founded in 1983 by the legendary billionaire macro trader Kovner. Over the past 10 years, the New York firm has reportedly returned 28%-plus annually.
Additionally, Marc Lasry, one of the major pioneers of the distressed securities market, owns Altria through his $5 billion hedge fund,
. Lasry's fund also owns a few other high-yield stocks, such as
Owens-Illinois
(OI) - Get Report
at 3.5% and
Williams
(WMB) - Get Report
at 1.3%.
We understand that a lot goes into making any investment decision, but having the opportunity to receive a nice yield on a large-cap stock for which a savvy investor has already done a lot of homework is a nice place to start.
For the entire list of 12 names, check out the
portfolio on Stockpickr.
At the time of publication, Altucher and/or his fund had no positions in stocks mentioned, although positions may change at any time.
James Altucher is president of Stockpickr LLC, a wholly owned subsidiary of TheStreet.com and part of its network of Web properties, and a managing partner at Formula Capital, an alternative asset management firm that runs several quantitative-based hedge funds as well as a fund of hedge funds. He is also the author of
Trade Like a Hedge Fund
and
Trade Like Warren Buffett
. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Altucher appreciates your feedback;
to send him an email.
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