Should You Buy the 3 Highest-Paying Dividend Stocks in the Dow Jones?

If you're looking for blue chip stocks, there's no better place to start than the Dow Jones Industrial Average (DJINDICES: ^DJI). This index of 30 stocks rarely changes and represents some of the most timeless businesses you can find on Wall Street, including JPMorgan Chase, Walt Disney, and IBM.

It's also a great place to start if you're looking for dividend stocks, as nearly every stock on the Dow Jones Industrial Average pays a dividend. Let's take a look at the three top-paying dividend stocks on the Dow to see if any are worth buying.

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1. Verizon (6.4% dividend yield)

If you're familiar with the Dow Jones, you're probably not surprised to Verizon Communications (NYSE: VZ) on the top of this list. Verizon has long been a top dividend payer, and it's been the lone telecom stock on the Dow since rival AT&T was removed in 2015.

In recent years, Verizon has struggled to grow its business as it's been outmaneuvered by T-Mobile and overinvested in millimeter-wave spectrum, not purchasing enough of the mid-band spectrum that is better for coverage.

In its first-quarter earnings report, revenue increased 1.5% to $33.5 billion, while net income improved from $4.7 billion to $5 billion, showing its margins are widening. The company beat estimates on both the top and bottom lines and said that it expected better net phone adds in 2025 than in 2024. It also forecast adjusted earnings-per-share growth of flat to 3%.

Since cell phone and internet service are considered must-have products these days, Verizon should have some protection from any tariff-related disruption. It also recently launched a three-year price lock program to capitalize on some of the anxiety around rising prices.

Overall, Verizon looks like a solid bet for a reliable dividend payer in today's volatile economy, though investors should temper their expectations for growth in the business.

2. Chevron (4.9% dividend yield)

Like the telecom sector, the energy sector is also known for paying generous dividends, especially as the sector has been pressured by falling oil prices since President Donald Trump made his "Liberation Day" tariff announcements.

Chevron (NYSE: CVX) stock fell 18% over a four-day span after that announcement in early April, and the stock has stayed down since then, even as the broad market has recouped some of those losses. Similarly, oil prices also plunged on the tariff announcement and have remained down since then, now trading around $60 a barrel, the lowest it's been since the pandemic.

Oil tends to be highly cyclical, and the tariffs are likely to slow global shipping, impacting demand for oil. There are already signs of a slowdown in the trucking sector due to falling demand.

Chevron's earnings estimates have come down rapidly this year, reflecting the growing macroeconomic headwinds. Despite the cyclical nature of the industry, Chevron has proven itself as a reliable dividend stock, as it's raised its dividend for 38 years in a row.

Its 4.9% dividend yield isn't shabby, but investors should be prepared for the stock price to drift lower, especially if the economy continues to weaken.

3. Merck (dividend yield 3.8%)

Finally, Merck (NYSE: MRK) rounds out the top three dividend payers on the Dow, also representing a sector known for dividends: pharmaceuticals.

Merck is now the lone pure-play pharma stock on the Dow following Pfizer's exit in 2020, when it was replaced by Amgen.

Merck has struggled in recent years as its business is now primarily dependent on cancer drug Keytruda, which made up nearly half of its sales in the first quarter, though it grew just 4%.

Overall revenue at Merck fell 2% year over year to $15.5 billion. Sales of Gardasil, an HPV vaccine and another of its top products, were down 41% to $1.3 billion.

As a pharmaceutical company, Merck is mostly insulated from the vicissitudes of the macroeconomy, but investors seem understandably concerned about the company.

Given those challenges, income investors can probably find better dividend stocks elsewhere.

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JPMorgan Chase is an advertising partner of Motley Fool Money. Jeremy Bowman has positions in Walt Disney. The Motley Fool has positions in and recommends Amgen, Chevron, International Business Machines, JPMorgan Chase, Merck, Pfizer, and Walt Disney. The Motley Fool recommends T-Mobile US and Verizon Communications. The Motley Fool has a disclosure policy.