Investing

Why the 5 Highest-Yielding Dow Stocks Are Great Second-Half Buys

Dow’s segments include Agricultural Sciences, which is engaged in providing crop protection and seed/plant biotechnology products and technologies, urban pest management solutions and healthy oils. Consumer Solutions consists of Consumer Care, Dow Automotive Systems, Dow Electronic Materials and Consumer Solutions-Silicones businesses.

The Infrastructure Solutions segment consists of Dow Building & Construction, Dow Coating Materials, Energy & Water Solutions, Performance Monomers and Infrastructure Solutions-Silicones businesses. Performance Materials & Chemicals consists of Chlor-Alkali and Vinyl, Industrial Solutions and Polyurethanes businesses. The Performance Plastics unit consists of Dow Elastomers, Dow Electrical and Telecommunications, Dow Packaging and Specialty Plastics, Energy and Hydrocarbons businesses.

Investors receive a 4.07% dividend. The $75 Jefferies price target for Dow stock is well above the $66.40 consensus target. Thursday’s closing share price was $67.99.

IBM

This blue-chip giant still offers investors a very solid entry point. International Business Machines Corp. (NYSE: IBM) is a leading provider of enterprise solutions, offering a broad portfolio of information technology (IT) hardware, business and IT services, and a full suite of software solutions. The company integrates its hardware products with its software and services offerings in order to provide high-value solutions.

IBM’s five major segments are: 1) Cognitive Solutions, 2) Global Business Services, 3) Technology Services & Cloud Platforms, 4) Systems and 5) Global Financing. Analysts cite the company’s potential in the public cloud as a reason for their positive outlook going forward.

CEO Ginni Rommety, who had been in the position since 2012, stepped down in January, and the stock market greeted the news in a very positive manner. Arvind Krishna, who has led the company’s cloud computing business, became the new chief executive. Rometty will remain as executive board chair until the end of the year.

The dividend yield here is 4.35%. BofA Securities has set a $175 price target. The consensus target is lower at $143.82. IBM stock closed Thursday’s trading at $150.54 a share.

Merck

This remains a leading health care stock for conservative investors. Merck & Co. Inc. (NYSE: MRK) offers therapeutic and preventive agents to treat cardiovascular issues, type 2 diabetes, asthma, nasal allergy symptoms, allergic rhinitis, chronic hepatitis C virus, HIV-1 infection, fungal infections, intra-abdominal infections, hypertension, arthritis and pain, inflammatory, osteoporosis, male pattern hair loss and fertility diseases.

The company also provides neuromuscular blocking agents for use in surgery, anti-bacterial products for skin and skin structure infections, cholesterol modifying medicines, non-sedating antihistamine and vaginal contraceptive products.

Shareholders receive a 3.51% dividend. The Truist Securities price target of $93 is in line with the consensus target of $93.29. Merck stock closed most recently at $76.14.


These five top companies from the venerable Dow Jones industrial average all still offer good entry points and are paying dependable dividends. Investors can almost count on the taper tantrum selling like in 2013 when the Federal Reserve begins to slow the quantitative easing this year, and these will be good stocks to be in when it does.

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