These 3 Dividend-Paying Dow Jones Stocks Can't Catch a Break. Here's Why They Are All Top Buys in October.

Key Points

• Investors won’t have to wait much longer for Honeywell’s highly anticipated breakup into three companies.

• The worst may be behind Nike, but its turnaround could take some time.

• Salesforce is trading at a historically low valuation.

• 10 stocks we like better than Honeywell International ›

The Dow Jones Industrial Average (DJINDICES: ^DJI) is chock-full of industry-leading companies --- many of which pay dividends. But stodgy dividend-paying companies aren't in style right now.

Mega-cap growth stocks like the "Ten Titans" have been driving broader market gains. After all, the allure of a few percentage points of yield isn't all that interesting when the S&P 500 is up 73% since the start of 2023.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Honeywell International (NASDAQ: HON), Nike (NYSE: NKE), and Salesforce (NYSE: CRM) are three Dow components that have all lost value in 2025. Here's why these three dividend stocks are great buys now for patient investors looking for ideas outside of red-hot growth stocks.

Image source: Getty Images.

1. Honeywell is cutting the red tape in an effort to create shareholder value

Honeywell investors are waiting for the industrial conglomerate to split into three stand-alone publicly traded companies. The materials business is expected to spin off later this year or early next year, while the automation business and aerospace segment are expected to become independent companies in the second half of next year.

It's unclear which component will stay in the Dow, or if a different company will replace Honeywell. After all, it was added to the Dow in 2020 to give the index exposure to the defense industry, industrials, and the industrial internet of things.

Honeywell's results have been decent, but nothing to write home about. In fact, Honeywell's inability to capitalize on industry growth trends because of its stodgy corporate structure is the essence of why some investors pushed for its breakup. However, because it trades at under 20 times forward earnings and with a 2.2% dividend yield, Honeywell stands out as a great buy for investors who don't mind giving its breakup time to play out.

2. After several blunders, Nike is ready to move forward

Nike has been under pressure due to a series of self-inflicted and industrywide challenges.

The apparel industry is struggling due to pullbacks in consumer spending and shifting preferences. Deckers Outdoor-owned Hoka and On Holdings are newer brands that are having a ton of success with Nike's core market -- athleisure consumers and athletes.

To make matters worse, Nike overspent on marketing when it could have put more resources into new products. It also made a massive shift to direct-to-consumer with Nike Direct, which was met with pushback from some of its wholesale partners. The idea was sound in that Nike wanted to directly interact with its customer base to improve product interest and boost margins by cutting out the middleman. But Nike's weak results prove that there is still value in its legacy partnerships.

Nike has implemented leadership changes to turn the business around and return to growth. But many investors are still not hitting the buy button until the turnaround shows more meaningful signs of progress.

The sell-off has pushed Nike's yield to 2.3%, which is relatively high for a former growth stock. And Nike has 23 consecutive years of boosting its payout. The dividend provides an incentive to buy and hold Nike through this difficult period.

3. Salesforce faces an uncertain future in the AI age

Trading down 26.5% year-to-date, Salesforce is the second-worst-performing Dow component in 2025, behind only UnitedHealth Group. Salesforce's growth is slowing, and investors are concerned that Salesforce won't be able to monetize artificial intelligence (AI). There's also the risk that AI-based tools will rival Salesforce's software-as-a-service (SaaS) offering, undercutting it on pricing and taking market share.

It's an unprecedented time for the former Wall Street darling. And Salesforce is far from the only SaaS stock under pressure. Salesforce has responded by developing agentic AI tools under its Agentforce lineup, which help users build, edit, and interact with media.

Salesforce has its risks, but the stock is relatively cheap -- sporting a forward P/E ratio of just 21.7. That's a potentially great value for a former growth stock that used to command a premium valuation relative to the S&P 500.

Salesforce initiated its first-ever dividend in early 2024 as a way to directly return value to shareholders. Salesforce raised its dividend in March of this year, but it was just a 4% increase. With a yield of just 0.7%, investors shouldn't expect the dividend to be a core element of Salesforce's investment thesis anytime soon.

3 beaten-down Dow stocks to buy now

Honeywell, Nike, and Salesforce operate in completely different sectors. But all three stocks present opportunities for contrarian investors looking for value in a premium-priced market.

Honeywell is arguably the best buy of the three because the business is performing decently well and could do even better post-breakup. Nike is a good buy if you believe in the brand's durability even during this challenging period. And Salesforce is a bold bet for investors who believe its competitive moat won't be eroded by AI.

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Daniel Foelber has positions in Nike. The Motley Fool has positions in and recommends Deckers Outdoor, Nike, and Salesforce. The Motley Fool recommends On Holding and UnitedHealth Group. The Motley Fool has a disclosure policy.