7 Dow Dividend Stocks With The Most Upside Potential

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 |  Includes: BA, CAT, CVX, HPQ, JPM, UTX, XOM
by: Dividend Stocks Online

The Dow Jones index is made up of 30 stocks and is the most commonly used index to track the stock market. Each of these 30 Stocks pays a dividend. Recently, we highlighted the best Dow stocks for dividend growth and the highest rated Dow dividend stocks. Today, we are highlighting 7 Dow stocks with the most room to grow, based on analyst expectations and price targets. Investment firm price targets are a great source of information, but they are not enough reason to make an investment decision all by themselves.

JPMorgan Chase (NYSE:JPM)

JPMorgan Chase has an average price target of $52.83 and was recently trading at $42.72, which is 19% below its average price target. JPM has a dividend yield of 2.46% and a payout ratio of 22.3. The company has a 3-year income growth rate of 50.16%, and has increased its dividend for the last year.

Hewlett-Packard (NYSE:HPQ)

Hewlett Packard has an average price target of $30.13 and was recently trading at $24.51, which is 19% below its average price target. HPQ has a dividend yield of 1.96 and a payout ratio of 15.3. The company will be increasing its dividend in 2012 vs 2011 and has a 5-year dividend growth rate of 4.5%. We are not big fans of HPQ. Our DSO rating has this stock at 77/100 points. It's interesting to see analysts expecting so much from HP.

Chevron (NYSE:CVX)

Chevron has an average price target of $125.27 and was recently trading at $102.52, which is 18% below its average price target. CVX has a dividend yield of 3.1% and a payout ratio of 23. The company has a 3-year income growth rate of 4% and a 5-year dividend growth rate of 9%. Chevron has increased its dividend for 19 consecutive years.

Caterpillar (NYSE:CAT)

Caterpillar has an average price target of $131.53 and was recently trading at $107.73, which is 18% lower than its average price target. CAT has a dividend yield of 1.7% and a payout ratio of 24.3. The company has a 3-year income growth rate of 11.5% and a 5-year dividend growth rate of 10.3%. Caterpillar has increased its dividend for 19 years.

United Technologies (NYSE:UTX)

United Technologies has an average price target of $94.7 and was recently trading at $81 which is 14% below its average price target. UTX has a dividend yield of 2.3% and a payout ratio of 34. The company has increased its dividend for 19 years and has a 5 year dividend growth rate of 13%.

Boeing (NYSE:BA)

Boeing has an average price target of $85 and was recently trading at $73.55, which is 13% below its average price target. BA has a dividend yield of 2.3% and a payout ratio of 31.5. The company did not increase its dividend in 2010 or 2011, but has already increased it for 2012. It has a 5-year dividend growth rate of 7%.

Exxon Mobil (NYSE:XOM)

Exxon has an average price target of $94.5 and was recently trading at 85.3, which is 10% below its average price target. XOM has a dividend yield of 2.2% and a payout ratio of 22. The company has increased its dividend for 29 consecutive years, and has a 5-year dividend growth rate of 7.64.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.