Verizon, Chevron, and AT&T: 3 Highest-Paying Dividend Stocks in the Dow Jones

The article discusses the "Dogs of the Dow" investment strategy, which involves buying stocks with high dividend yields in the Dow Jones Industrial Average. The three highest-paying dividend stocks in the Dow Jones are Verizon, Chevron, and Exxon Mobil, with yields of 6.2%, 4.3%, and 4.1%, respectively. While the strategy is not perfect, these stocks are considered proven winners with rich cash flows and long operating histories. However, investors should consider the potential for growth and the reasons behind the low stock prices before making a decision.

The "Dogs of the Dow" investment strategy, popularized by Michael B. O'Higgins in his 1991 book, involves buying the highest-yielding dividend stocks in the Dow Jones Industrial Average (DJIA). This strategy aims to capitalize on short-term market inefficiencies and the potential for dividend growth. As of September 2025, the three highest-yielding dividend stocks in the DJIA are Verizon (VZ), Chevron (CVX), and Exxon Mobil (XOM), with yields of 6.2%, 4.3%, and 4.1%, respectively [1].

The Dogs of the Dow strategy is appealing to investors seeking steady income and long-term capital appreciation. The strategy is based on the premise that companies with high dividend yields are often undervalued or out of favor with the market. By investing in these stocks, investors can potentially benefit from both dividend income and capital appreciation as the market corrects its valuation errors.

Verizon (VZ), Chevron (CVX), and Exxon Mobil (XOM) are considered proven winners with rich cash flows and long operating histories. Verizon, for instance, has a strong position in the telecommunications sector and has consistently increased its dividends over the years. Chevron and Exxon Mobil, on the other hand, are major players in the energy sector, benefiting from their extensive reserves and strong cash flows. However, investors should consider the potential for growth and the reasons behind the low stock prices before making a decision.

One of the key advantages of the Dogs of the Dow strategy is its simplicity. Investors need only to purchase the top three dividend-yielding stocks in the DJIA and hold them for the year. This strategy reduces the need for extensive research and analysis, making it accessible to both novice and experienced investors.

However, the Dogs of the Dow strategy is not without its risks. The strategy relies on the assumption that the market will correct its valuation errors, which may not always be the case. Additionally, the strategy may underperform in bull markets, as high-yielding stocks may be more sensitive to market downturns. Furthermore, the strategy does not account for changes in dividend policies or company-specific risks.

In conclusion, the Dogs of the Dow investment strategy offers a simple and potentially rewarding approach to dividend investing. By focusing on high-yielding stocks in the DJIA, investors can potentially benefit from both dividend income and capital appreciation. However, investors should carefully consider the risks and potential for growth before implementing this strategy.

References:
[1] https://findependencehub.com/dogs-of-the-tsx-dividend-stock-picks/