This weekend's MarketWatch included "How to win the quest for yield with stocks," an article covering the quest for yield. This statement in the article got my attention: "Many companies are now paying dividends well in excess of their own bond yields."

Stocks versus bonds for income is a topic near and dear to me, so I decided to pull the thread and see how many of the 30 companies in the Dow Jones Industrial Average (INDEX: ^DJI) have dividend yields that top their bond yields. For each of the 30 stocks, I found bond issues with about 10 years to maturity, and compared the bond yield to the dividend yield. Fourteen of the 30 have a dividend yield that tops the yield on their bonds based on recent prices.

Company

Dividend Yield

Bond Yield

Bond Matures

DuPont

3.15%

2.64%

April 1, 2021

Intel

2.99%

2.80%

Oct. 1, 2021

Johnson & Johnson

3.59%

2.21%

May 15, 2021

Kraft Foods

3.11%

2.93%

Feb. 10, 2020

Coca-Cola

2.84%

2.61%

Sept. 1, 2021

McDonald's

2.89%

2.55%

Jan. 15, 2022

Merck

4.45%

2.43%

Jan. 15, 2021

Microsoft

2.60%

2.26%

Feb. 8, 2021

Pfizer

4.03%

3.30%

March 1, 2023

Procter & Gamble

3.19%

2.25%

Feb. 6, 2022

AT&T

5.76%

3.04%

Feb. 15, 2022

Travelers

2.82%

2.74%

Nov. 1, 2020

Verizon

5.37%

3.02%

Nov. 1, 2021

Wal-Mart

2.66%

2.52%

April 15, 2021

Source: Yahoo! Finance and FINRA.org.

This yield inversion means these companies could issue debt to finance a share buyback and improve cash flow. That doesn't mean they should, just that they could. More importantly, investors looking to the bonds of these companies for income should be taking a hard look at the stock instead. If selling bonds to buy stock would help a company's cash flow, it's reasonable to expect an investor's cash flow could also improve by choosing stock over a company's bonds in some cases.

Of course, dividend yield alone isn't enough reason to make an investment. But this is fertile ground for further research. I have outperform CAPScalls on Intel (Nasdaq: INTC), Johnson & Johnson, McDonald's (NYSE: MCD), and AT&T on my scorecard; they're all up compared to their start prices, and three of the four are ahead of CAPS' benchmark.

Fool contributor Russ Krull owns shares of Intel, McDonald's, and AT&T, but none of the other companies mentioned.

The Motley Fool owns shares of Wal-Mart Stores, Intel, Johnson & Johnson, Coca-Cola, and Microsoft. Motley Fool newsletter services have recommended buying shares of Coca-Cola, Intel, Johnson & Johnson, Microsoft, McDonald's, Procter & Gamble, Pfizer, and Wal-Mart Stores. Motley Fool newsletter services have recommended creating a diagonal call position in Wal-Mart Stores, a bull call spread position in Microsoft, and a diagonal call position in Johnson & Johnson. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.