In this article, we will take a look at the 12 Best Dow Jones Dividend Stocks to Buy According to Hedge Funds.
The Dow Jones Industrial Average tracks 30 large, well-established companies across areas like finance, technology, and pharmaceuticals. Because the list is so small, people often question how much it really says about the stock market overall.
Fidelity’s research helps put that concern into perspective. When markets unraveled in March 2020, the Dow fell nearly 3,000 points in a single session as COVID-19 spread and uncertainty took over. However, stocks recovered, and the Dow eventually pushed to record highs, much like the broader market did in the years that followed.
Over time, the performance gap hasn’t been dramatic. From June 2015 through June 2025, the Dow posted an annualized return of 12.1%, according to Fidelity. The S&P 500 did slightly better at around 13.6%, while the Nasdaq Composite led the group with a 15.2% annualized gain. Those figures include tough periods, including 2022, when markets struggled.
That year was telling. The Dow fell 8.9%, while the S&P 500 dropped more than 19% and the Nasdaq sank over 33%. The difference shows why the Dow often behaves differently. Markets move in cycles. Losses happen. The Dow doesn’t always capture every rally, but it has tended to hold up better during downturns, which has helped support steady gains over the long run.
Given this, we will take a look at some of the best Dow Jones dividend stocks to invest in.
Photo by Dan Dennis on Unsplash
Our Methodology:
For this list, we started with the 30 stocks in the Dow Jones Industrial Average and selected dividend-paying stocks from that group. From that list, we picked stocks with dividend yields of at least around 1%, as of January 27. Then, we ranked those stocks according to hedge fund investors, as per Insider Monkey’s database of Q3 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
12. The Travelers Companies, Inc. (NYSE:TRV)
Number of Hedge Fund Holders: 47
Dividend Yield as of January 27: 1.56%
On January 26, Argus analyst Kevin Heal lifted his price target on The Travelers Companies, Inc. (NYSE:TRV) to $295 from $287 and reiterated a Buy rating after the company delivered a strong fourth-quarter earnings beat. Heal said results came in well ahead of expectations, helped by lower catastrophe losses and a meaningful boost from net investment income. Argus also sees room for margins to improve as Travelers continues raising prices on auto and homeowners policies while keeping customer retention steady.
According to Reuters, Travelers easily exceeded Wall Street’s fourth-quarter profit estimates on January 21, driven by solid underwriting performance and stronger investment returns. Insurance spending has remained resilient even as businesses and consumers pull back in other areas, as demand for coverage against financial risk, natural disasters, and unexpected losses continues to hold up. Net written premiums in the quarter edged up 1% to $10.86 billion.
Catastrophe losses totaled $95 million on a pre-tax basis, largely tied to winter storms that hit several states. For US insurers, catastrophe losses remain a key swing factor, with earnings often shaped by the timing and severity of major weather events. Travelers has been deliberately reducing exposure to large property risks where pricing does not fully compensate for catastrophe exposure, sticking to disciplined underwriting while some competitors continue to prioritize volume.
Underlying profitability improved as well. The company’s combined ratio declined by 1.8 percentage points to 82.2%, a level that signals premiums collected more than covered claims and expenses.
The Travelers Companies, Inc. (NYSE:TRV) provides property and casualty insurance across auto, home, and business lines, operating through its Business Insurance, Bond & Specialty Insurance, and Personal Insurance segments.
11. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 60
Dividend Yield as of January 27: 7.00%
On January 26, Wells Fargo cut its price target on Verizon Communications Inc. (NYSE:VZ) to $41 from $43. The firm kept an Equal Weight rating on the stock. The adjustment came as the firm took another look at the wireless space.
Wells Fargo said fourth-quarter trends are shaping up better than expected, with subscriber growth showing some upside. Even so, competitive pressures are still a concern. That ongoing tension has kept investor sentiment cautious and pushed the firm to lower price targets across the sector.
For Verizon, the investment case continues to lean heavily on the dividend. The company has raised its payout for 19 straight years. Those increases have not come at the expense of the balance sheet. By late 2025, Verizon had cut net unsecured debt to about $112 billion and brought its debt-to-EBITDA ratio down to roughly 2.2. In practical terms, that suggests the company is in a much better position to handle its debt using operating earnings.
Management has repeatedly pointed to this balance sheet progress as essential. It helps protect the dividend while leaving room to keep spending on priorities like 5G and fiber buildouts.That approach sets Verizon apart from some high-profile names piling on debt to chase AI-related projects, data centers, or large acquisitions. Verizon has stayed in its lane, focusing on wireless and broadband, and steering clear of the risks that come with pushing into less tested territory.
Verizon Communications Inc. (NYSE:VZ) operates as a holding company. Through its subsidiaries, it provides communications, technology, information, and streaming services to consumers, businesses, and government customers.
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