The Dow Jones Industrial Average is managed by S&P Dow Jones Indices, with composition changes determined by an index committee rather than any fixed formula or automatic screening process.
Unlike the S&P 500, which uses largely rules-based, quantitative criteria, the Dow’s committee makes essentially editorial judgment calls on which companies belong in the 30-stock index.
The S&P Dow Jones Indices Averages Committee is made up of full-time analysts and economists who weigh factors including reputation, sector balance, stock price distortions, and overall fit within the U.S. economy.
Because the Dow is price-weighted rather than market-cap weighted, a stock with an unusually high or low price can distort the index’s calculations and trigger a membership change.
A review of stocks removed from the Dow over the past several decades reveals that some ejected companies went on to soar in value while continuing to pay substantial dividends to shareholders.
Altria (NYSE: MO), one of the world’s largest tobacco producers, was removed from the index in 2008, and shareholders who held through the transition saw their shares surge by more than 150% in the following years, excluding dividends, according to Kiplinger.
Altria currently offers a 5.66% dividend yield and raised its quarterly dividend in the fall of 2025 by 3.9%, from $1.02 to $1.06 per share, marking its 57th consecutive annual dividend increase.
AT&T (NYSE: T), the world’s fourth-largest telecommunications company by revenue, was removed from the Dow in 2015 to make room for Apple (NASDAQ: AAPL), and currently carries a dividend yield of 5.06% with 13 analysts assigning the stock a Buy rating.
Exxon Mobil (NYSE: XOM) was removed in August 2020 after a remarkable 92-year run on the index, displaced to make room for Salesforce (NYSE: CRM), yet continued raising its dividend and delivering strong total returns for investors.
Exxon completed its acquisition of Pioneer Natural Resources in 2024 in an all-stock transaction valued at $59.5 billion, creating the largest U.S. oilfield producer and securing a decade of low-cost production ahead.
International Paper (NYSE: IP), which provides sustainable fiber-based packaging solutions across North America, Latin America, Europe, and North Africa, was removed from the Dow in April 2004 and subsequently rebounded approximately 25%, delivering total returns exceeding 100% when dividends are included, according to Kiplinger.
The company currently offers a 5.09% dividend yield, and its product lines span corrugated packaging, solid fiber, retail displays, bulk packaging, and a full range of recycling solutions for retailers and e-commerce companies.
Pfizer (NYSE: PFE), founded in 1849 in New York, was removed from the Dow in August 2020 alongside Exxon to accommodate Amgen (NASDAQ: AMGN), and currently pays a 6.93% dividend that has increased annually for the past 15 years.
Pfizer anticipates full-year 2026 revenues in the range of $59.5 billion to $62.5 billion, though the outlook reflects an expected $1.5 billion decline in COVID-19 product sales and an additional $1.5 billion headwind from upcoming drug patent expirations.
The broader pattern across these five stocks suggests that Dow removal does not necessarily signal a company’s decline, and income-focused investors willing to hold through transitions have historically been well rewarded.
