While the stock market continues to reach new highs for the year, dividend yields for the thirty stocks that make up the Dow Jones Industrial index have remained relatively unchanged in the past seven months, currently averaging 2.62 percent compared to 2.85 percent back in August 2009.
An eleven percent gain for the Dow since late August has not had much of an impact on yields. The real change, however, occurred from March to August 2009, as the index rose ~45 percent, pushing the average yield lower by about 165 basis points.
One-third of Dow stocks have yields greater than 3 percent, with AT&T and Verizon leading the list. Of the current Dow components, the only company not offering a dividend payment is Cisco Systems.
Other companies that are up over 5 percent so far in 2010 and offer above average dividend payments include DuPont, Home Depot, Kraft Foods, Intel, McDonald's, Merk, and Procter & Gamble.
Dividend payments help investors offset some of the losses during a market pullback, and may substantially add to the gains during a bull market. Consider shares of Boeing, for example, which are up 129 percent in price since the March low, but have seen an increase of 137 percent, accounting for reinvested dividend payments.
Additionally, General Electric, the parent company of NBC/CNBC, Wal-Mart, Home Depot, Coca Cola, 3M, United Technologies and AT&T are some of the companies that have rewarded investors with dividend increases this year.
The table below highlights the current yields for all 30 Dow components.
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