3 Blue Chip Dividend Stocks to Buy in June as the Dow Jones Industrial Average Turns 130

The Dow Jones Industrial Average (DJINDICES: ^DJI) is one of the oldest and most globally recognized stock market indexes in the world. Established by Charles Dow on May 26, 1896, the index celebrates its 130th anniversary today. But the Dow's composition has changed dramatically over time.

There are only 30 Dow components, compared to hundreds in the S&P 500 and thousands in the Nasdaq Composite. With so few seats, each Dow member effectively serves as a representative of a stock market sector. The components have changed to mirror the evolving economy, with the addition of Nvidia (NASDAQ: NVDA), Sherwin-Williams, Amazon, Salesforce, Amgen, and Honeywell International over the last six years and the deletion of Intel, Dow Inc., Walgreens Boots Alliance, ExxonMobil, Pfizer, and RTX.

So while investors typically associate Dow stocks with stodgy, low-growth dividend payers, the index has modernized to include a blend of growth, income, and value stocks.

Here's why Nvidia, Visa (NYSE: V), and Procter & Gamble (NYSE: PG) stand out as top Dow stocks to buy now.

Image source: Getty Images.

Nvidia is becoming less cyclical

For years, Nvidia paid a mere penny-per-share quarterly dividend. But as I predicted, Nvidia made a substantial dividend increase on May 20, boosting the payout by 2,400% to $1 per share per year. Nvidia isn't a high-yield stock by any means -- the new dividend yields just 0.5% at recent prices -- but the dividend raise makes it more appealing for investors who want to generate passive income from their holdings.

Nvidia operates in the highly cyclical semiconductor industry, where big swings in capital spending from key customers can lead to earnings spikes and downturns. That variability makes it difficult to pay a steadily growing dividend, but Nvidia's earnings could become a lot less cyclical going forward for a few reasons.

The surge in artificial intelligence (AI) demand is a paradigm shift in cloud computing rather than a temporary spike.

Nvidia has broadened its market share in data centers through rack-scale solutions that include multiple chips, not just graphics processing units. On May 18, Nvidia delivered new Vera Rubin central processing unit systems to Anthropic, OpenAI, Oracle, and SpaceX.

Nvidia provides software solutions purpose-built for AI through its CUDA platform. CUDA has been around for decades and acts as a foundational platform for AI training and inferencing. Inferencing is where agents and other tools do real work by applying the knowledge base of an AI model. The inferencing boom will unlock recurring revenue for hyperscalers that charge customers based on usage -- making Nvidia less dependent on a cyclical infrastructure build-out.

Nvidia's first-quarter fiscal 2027 earnings report featured record sales and surging data center revenue, signaling that AI spending is showing no signs of slowing down. Add it all up, and Nvidia remains the best Dow growth stock to buy now.

Visa continues to deliver excellent results despite a difficult operating environment

Financials have been one of the worst-performing sectors year to date as economic uncertainty, inflationary pressures, elevated interest rates, weak consumer spending, and a sluggish housing market are dragging down the sector. Visa is down 6.2% year to date -- which isn't as bad as the 12.7% and 15.7% sell-offs in Mastercard and American Express, respectively.

Investors are getting an incredible opportunity to scoop up shares of Visa for a highly reasonable 30 times free cash flow and 29 times earnings.

Visa has one of the best business models in the world. Financial institutions partner with Visa to use its global payments network, with Visa collecting fees based on transaction sizes and frequency while its partners bear the credit risk. That dynamic makes Visa insulated from the risk of customers defaulting on their credit card debt. However, earnings growth will slow if households and businesses are spending less with their cards, which is why Visa and its peers are seeing their stock prices fall.

Despite the economic headwinds, Visa continues to generate double-digit revenue and earnings growth, including a 9% increase in payments volume and processed transactions in its latest quarter. Due to its low operating expenses, Visa sports sky-high operating margins, which support a healthy shareholder capital return program. Visa's dividend yield is low, at 0.8%, but the $1.3 billion it spent on dividends in its latest quarter was dwarfed by $7.9 billion in share buybacks. That capital return strategy has paid off incredibly well for shareholders, given Visa's outstanding long-term performance.

Procter & Gamble's yield is at multiyear highs

Procter & Gamble (P&G) was added to the Dow on May 26, 1932 -- the index's 36th birthday. Since ExxonMobil was removed in 2020, P&G is now the Dow's longest-tenured member.

In April, P&G raised its dividend for the 70th consecutive year, one of the longest active streaks among public U.S. corporations.

But P&G's earnings and dividend growth rate have slowed in recent years due to sluggish volume growth and consumer resistance to price increases. Despite a challenging operating environment, P&G is holding up a lot better than its peers -- a testament to its excellent portfolio of brands spanning several everyday household and personal use categories.

With P&G's stock price up just 4.7% over the past five years, the stock's valuation has compressed to just 21 times earnings -- a steep discount to its 10-year median P/E of 25.4. And for the first time in over seven years, P&G's dividend yield recently hit 3%.

Add it all up, and P&G is the ideal dividend-paying value stock for risk-averse investors to buy now.

American Express is an advertising partner of Motley Fool Money. Daniel Foelber has positions in American Express, Nvidia, Oracle, and Procter & Gamble and has the following options: short July 2026 $200 calls on Oracle and short October 2026 $220 calls on Oracle. The Motley Fool has positions in and recommends Amazon, American Express, Amgen, Honeywell International, Intel, Mastercard, Nvidia, Oracle, Pfizer, RTX, Salesforce, and Visa. The Motley Fool recommends Sherwin-Williams. The Motley Fool has a disclosure policy.