The storied past of the nearly 140-year-old Dow Jones Industrial Average makes it one of the most reputable indexes out there. But with just 30 components, the index isn't as useful a barometer for the stock market as the S&P 500 or the Nasdaq Composite. Plus, the Dow is price-weighted.

However, the Dow can be a great source for finding top stocks. Its components tend to be trusted, mature businesses. In many ways, each Dow Jones component is a representative of a certain industry. For example, Apple and Microsoft represent big tech and consumer electronics. JPMorgan Chase represents the banking industry. Chevron represents big oil. And so on.

Because so many Dow components are mature businesses, the vast majority (27 to be exact) of these stocks pay dividends. Five of these companies have dividend yields over 5%: 3M (MMM -1.31%), International Business Machines (IBM 0.71%), Verizon Communications (VZ -0.05%), Walgreens Boots Alliance (WBA -0.33%), and Dow, Inc. (DOW -1.15%). For context, the average stock in the S&P 500 has a dividend yield of just 1.7%.

Here's a primer on each company and which high-yield dividend stock is the best buy now.

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3M is a turnaround play

Having raised its dividend for 65 consecutive years, 3M is a Dividend King -- a member of an elite cohort of companies that have paid and raised their dividends for over 50 years in a row. However, it's the stock's underperformance, not these increases, that has led its yield to balloon to a mouth-watering 6%.

Getting a Dividend King with a 6% yield would normally be a no-brainer. But 3M has disappointed investors for years due to poor execution, bloated expenses, and legal woes related to its per- and polyfluoroalkyl substances (PFAS), commonly known as "forever chemicals." Wall Street has grown intolerant of these challenges -- and the stock price has suffered the consequences. 3M stock is down 8.5% over the last 10 years and 49.1% over the last five years.

Given 3M's track record and inexpensive valuation, the stock is worth buying for long-term investors with the patience to let the company recover (even though this could take some time).

IBM could be returning to growth

Next year, IBM will celebrate its 45-year anniversary in the Dow Jones. When IBM was first added, it was one of the most powerful companies in the world. But since then, Big Blue has lost market share due to the company's failure to recognize and capitalize on the switch from centralized computers to personal ones.

IBM stock has gone practically nowhere over the last five years. But despite this slump, the company continues to turn a profit and generate positive free cash flow (FCF) that has supported 28 consecutive years of dividend raises.

IBM's investments in its hybrid cloud have been largely underappreciated by Wall Street. Yet the most exciting prospect for IBM may be artificial intelligence. IBM was a pioneer in AI. But that was decades ago. A lot has changed since then, and it's up to IBM to prove it can make meaningful strides monetizing AI in today's market. Given that IBM is likely to ramp up investments in this field, its FCF is going to be under pressure, which could make the dividend less secure.

IBM may be a stock worth looking at now. But the company could have a hard time sustaining its dividend growth. If IBM executes its growth plan at the expense of dividend raises, it's going to be a net positive for investors. But that's a big "if."

Verizon and Walgreens sport deceptively high yields

If there are two dividend stocks in the Dow Jones to avoid, it's Verizon and Walgreens. Verizon is the highest-yielding stock in the index with a dividend yield of 7.2%. Walgreens is in second place with 6.6%. But both of these businesses have been struggling. Declining FCF paired with a growing dividend is a recipe for failure.

WBA Free Cash Flow Per Share (Annual) Chart

WBA Free Cash Flow Per Share (Annual) data by YCharts

Verizon has been losing market share to T-Mobile US and, to a lesser extent, AT&T. The transition to 5G has presented a capital-intensive opportunity. But Verizon simply hasn't executed relative to its competitors. A big reason for this is that Verizon pays a massive dividend, while T-Mobile doesn't. Verizon shelled out a staggering $10.8 billion in dividends last year, leaving it with a lot less dry powder to invest in growth.

Meanwhile, Walgreens has been a business in decline for over a decade. The stock price has suffered and is down over 35% in the past 10 years.

Walgreens is similar to 3M in that it continues to disappoint investors. For a company to be able to support future dividend raises, it needs to chart a path toward earnings growth. And while 3M looks like it could stage an epic turnaround and is a dirt-cheap stock, the prospects for Walgreens are more bleak.

Verizon and Walgreens are excellent examples of why a high dividend yield on its own, even from a well-known company, doesn't automatically make a stock a buy.

Dow is an underrated dividend stock

Dow Chemical, known now simply as Dow, Inc., is a fairly dull company but a great income stock. The materials company makes commodity chemicals that underpin much of the industrial and commercial economy. It operates in three major segments: packaging and specialty plastics (bags, bottles, drums, lids, consumer packaging etc.), industrial intermediates and infrastructure (silicones, adhesives, sealants, etc.), and performance materials and coatings. Simply put, this is a massive industrial company that plays a role in virtually everything.

Dow doesn't have a lot of brand power. Instead, it relies on scale and cost management to sustain high margins. However, its business is inherently cyclical since it depends on a growing economy. If companies aren't making more stuff, then they don't need more material inputs from Dow.

The trick for Dow is to have a strong enough balance sheet to support its dividend during downturns, and then a competitive business to capitalize on growth cycles. It has these qualities in spades. The company's balance sheet is in impeccable shape, as it has used excess FCF to pay down debt.

DOW Net Total Long Term Debt (Quarterly) Chart

DOW Net Total Long Term Debt (Quarterly) data by YCharts

The company's dividend is easily covered by FCF and net income. And Dow has a price-to-earnings ratio of just 13.2 and a yield of 5.4%. 

Dow isn't going to wow investors with outstanding capital gains. But it can provide a reliable source of passive income with exposure to the broader economy. 

All told, this is the highest-quality, high-yield dividend stock in the Dow Jones Industrial Average, not because it's a flashy name, but because it's a well-run business that can easily support its dividend.