Top 3 High-Yield Dow Stocks Worth Considering

Investors eye high-yield stocks in the Dow Jones. Verizon, Chevron, and Merck offer attractive dividends, but potential risks with debt and sector volatility warrant careful consideration before investing.

Date: 16-03-2025

AI Rating: 6

Verizon Communications (NYSE: VZ) presents a 6.2% dividend yield, which significantly exceeds the S&P 500 average of 1.2%. However, Verizon's debt-to-equity ratio of 1.45 raises concerns, as it is higher than its competitors. Approximately 57% of Verizon's free cash flow is allocated to dividends in 2024, reflecting its ability to sustain the dividend despite its leveraged position.

Chevron (NYSE: CVX) offers a 4.5% dividend yield and boasts a 37-year record of dividend increases. Its diversified operations mitigate risks from market volatility, while a low leverage provides flexibility for management to maneuver through downturns. This makes Chevron a reliable option within the energy sector.

Merck (NYSE: MRK) showcases $64.2 billion in sales for 2024 along with an attractive 3.4% dividend yield. Merck's valuation metrics, including price-to-earnings ratios below five-year averages, indicate that the stock is reasonably valued. However, the current dividend yield is only average compared to its historical range, which may dissuade some income-focused investors.

Overall, while Verizon's debt needs to be monitored, Chevron seems to provide a stable option in energy, and Merck is a strong firm but lacks compelling yield at present. Investors should weigh these factors before making investment decisions.

Stocks: VZ CVX MRK