The Dow Jones Industrial Average (DJINDICES:^DJI) index is a rich hunting-ground for income investors. The index is packed with high-quality businesses, and since Cisco Systems (NASDAQ:CSCO) fired up a dividend policy in 2011, every single one of the 30 members pays dividends today.
How does an income-hungry investor pick and choose between these mouth-watering yields? One obvious answer would be to simply grab the biggest yields available and then sit back and count the steady stream of dividend checks. But it ain't always that easy.
Telecom giant AT&T (NYSE:T) currently offers the richest payouts on the Dow with a 5.4% yield. You can also set a clock based on the company's habit of raising dividend payouts every year:
Archrival Verizon (NYSE:VZ) comes next with a 4.8% yield and very similar history of raises:
However, both of these stocks have soared in recent years, driving dividend yields down for new shareholders. The smartphone explosion has been very, very good to these companies, but the best time to invest here would have been a couple of years ago.
The third-richest payout runs straight in the other direction. Intel (NASDAQ:INTC) yields 5.6% right now, and the chip giant's dividend yield has never been fatter:
Intel's share prices are plunging, as investors fear the end of the PC era. The company rules the PC world with an iron fist but has yet to make a mark on the mobile-computing market that's replacing it.
If you believe in the "death of the PC" mantra, you'd be smart to invest in the telecoms that benefit from its demise. On the other hand, Intel makes sense if you see the company making inroads in the new era -- or if you think PCs and server systems are due for a comeback.