Dogs of the Dow: Definition, How It Works, 2022 Members

The weakest 2017 dogs are ExxonMobil, IBM and Verizon with declines of 15.2%, 13.2% and 10.2% year-to-date, respectively. IBM is in bear market territory, 21.2% below its post-election high, while ExxonMobil and Verizon are in correction territory at 17.9% and 12.6% below their post-election highs. Conversely, pharma stocks have suffered from concerns over plans to control drug costs.

Boeingclosed at $240.33 on Sept. 1, up 54.4% year-to-date, and in bull market territory 70.1% above its post-election low of $141.29 set on Nov. 8. The stock ended 2016 with a dividend yield of 3.65%, and it’s now only 2.61%, so it should no longer be bought for its dividend. Has produced strong returns so far in 2017, rising 8% and setting new record-high closes 20 times since the beginning of the year. Yet for those who had hoped to outperform the Dow by using a popular strategy that focuses on high-dividend Dow components, this year hasn’t been the best. The Dogs of the Dow are underperforming the broader market, and they’ve just barely managed to gain any ground at all as the year approaches the halfway point. As you would expect from a value strategy, the Dogs is more volatile than the S&P 500 – the extra return and the extra risk go hand in hand, as always.

• Every investor is looking to earn positive return on stock investment and they hope to beat the market return.
• Cisco Systemsclosed at $32.30 on Sept. 1, up 6.9% year-to-date and 6.6% below its post-election high of $34.60 set on May 8.
• That yield reflects a roughly 6% hike to its payout announced in December 2018 – Pfizer’s ninth consecutive annual dividend increase.
• The Dogs of the Dow strategy requires once-a-year portfolio adjustments.
• This tech giant makes Internet Protocol networking products for the communications and IT industries.

The Walt Disney Co was projected to net $539.82, based on the median of target estimates from twenty-eight analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 21% over the market as a whole. The Walt Disney Co was projected to net $263.20, based on the median of target estimates from 29 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 20% over the market as a whole. My quarterly and annual pivots are $32.30 and $32.53, respectively.

Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. In particular, the energy industry has managed to rebound as much as investors had hoped, and ongoing issues in the wireless telecommunications and pharmaceutical industries have hurt some other key Dow components. Coming into this year, the Dogs of the Dow strategy had outperformed the broader average in six years out of the most recent seven. That left investors optimistic about the prospects for the Dogs in 2017. Which high dividend paying stocks would make the cut as one of the Dogs of the Dow today? The first investment strategy that I can remember hearing about is the Dogs of the Dow strategy.

Company Information

Shares dropped more than 20% between the early October highs and Christmas Eve lows. Its consumer-staples products offer decent margins and repeat purchases that fuel the consistent profits necessary to pay out those steady, and steadily growing, dividends. That said, PG has worked on paring back its product line to focus on its strongest brands, which is starting to become a full stack web developer have a positive effect on organic growth. This, paired with an aggressive share repurchase program, could make Procter & Gamble a lucrative Dog in 2019. In 2018, the Dogs of the Dow lost just 1.5% on average versus a 5.6% decline for the Dow and a 6.2% drop for the Standard & Poor’s 500-stock index. The win marked the Dogs’ fourth consecutive year of outperformance.

Further, its diverse businesses include upstream and downstream and everything in between – refining and retail can actually help lessen the negative impact of weak oil and natural gas prices. P&G was the target of a sustained campaign in 2017 by activist investor Nelson Peltz, who claimed the company’s management structure was contributing to lackluster share performance. Peltz, who ultimately was admitted to the Procter & Gamble board in March 2018, may be having an impact. PG provided a bit of refuge to investors in 2018 by notching a market-beating 1.4% gain on top of a 3.1% dividend. They love companies that raise dividends year in and year out even better than just having the same dividend year after year.

Step 1: Identify the 10 highest dividend-yield Dow stocks

In 2012 I retired from doing quality service analysis in Boston and moved to North Carolina in 2013, thence to Central Oregon in 2018. My fascination with capital preservation, long-term investments, and trading systems keeps me blogging for Seeking Alpha. My articles focus on dividend yields, analyst median 1 yr targets, free cash flow yields, and one-year total returns as stock trading indicators.

• GSK plans to eventually spin off the JV as an independent company; Pfizer will become a pure-play pharmaceutical company, leveraging the growth in that industry.
• The strategy requires identifying those stocks and buying them at the end of a calendar year.
• Only market makers or “authorized participants” may trade directly with the Fund, typically in blocks of 5,000, 25,000 or 50,000 shares.
• 2022 Mid-Year Investment Outlook While COVID-19’s remarkable effects on economies and policies remain top of mind, a new set of uncertainties has entered the picture.
• ProShares now offers one of the largest lineups of ETFs, with more than $55 billion in assets.

Merck (MRK, $75.60) didn’t get to be in the Dogs by underperforming in 2018 – its roughly 36% surge last year suggests that health care continues to be an important sector. The company’s Keytruda – a cancer treatment that has proven to reduce the risk of death when used with chemotherapy – has been vital to the company’s success. Keytruda sales doubled to $5 billion during the first three quarters of 2018, and revenues from the drug are projected to top $10 billion within a few years.

As it turns out, there’s an exchange-traded-note that tracks the Dogs strategy, so I was able to analyze that data easily rather than recreating the index myself. One of my parent’s friends, who knew I was interested in stocks back in high school, told me one of the ‘secrets’ to beating the market. The Dow Jones Industrial practical linux for network engineers Average Index is a price-weighted index of the 30 largest, most widely held stocks traded on the New York Stock Exchange. The Fund is non-diversified and may experience greater volatility than a more diversified investment. It’s simple to execute, and the historical returns far exceed the traditional Dogs of the Dow.

The Beta number showed this estimate subject to risk/volatility 10% under the market as a whole. Verizon Communications Inc was projected to net $306.88, based on dividends, plus the median of target price estimates from 22 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 64% less than the market as a whole. This should mean that companies with a high dividend relative to stock price are near the bottom of their business cycle, so their stock price likely would increase faster than companies with low dividend yields.

Analysts Forecast A 20.49% Advantage For 5 Highest-Yield, Lowest-Priced of 10 Dow Dogs As Of July 1, 2023

Cisco has had a volatile ride relative to earnings this year and has five consecutive quarters of beating analysts’ earnings-per-share estimates. A positive reaction to earnings on Aug. 25 provided the momentum to achieve the 2018 high of $49.47 set on Oct. 3. Failure to hold the 200-day simple moving average at $44.84 on Dec. 17 fueled the decline to $40.25 set on Dec. 24. The tariff situation and weak local overseas currencies could squeeze earnings in 2019. It’s also worth noting that since 2000, Chevron’s shares have delivered an average annual total return of about 12% – more than twice the 5%-plus total return from the S&P 500 during the same time frame. Just note the use of the word “average” – a look at CVX’s stock chart shows plenty of volatility between then and now.

The Index includes 30 large-cap, blue-chip U.S. stocks, excluding utility and transportation companies. They represent the leading U.S. companies in the industries driving the U.S. stock market, are widely held by investors and have long records of sustained growth. This gap between high share price and low dividend per $1k means, no matter which chart you read, 24 of all 27 Dow dividend payers are low risk and low opportunity dogs, with the non-dividend payers being particularly dismal. The Dow top-ten average cost per dollar of annual dividend for July 1, 2022, was $31.22 per YCharts or $31.01 by the IndexArb reckoning.

Dogs of the Dow concept and methodology

Goldman Sachs Group Inc was projected to net $380.53, based on dividends, plus the median of target price estimates from twenty-six analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 39% over the market as a whole. As for DIS, the magic kingdom may be close to reinstating a dividend but don’t hold your breath. Furthermore, the newest of the three latest no-dividend stocks on the block, CRM, is simply overpriced.

The 12x3x3 weekly slow stochastic reading ended last week at 68.04, down from 68.58 on Aug. 25. The Dogs of the Dow are 10 stocks chosen from the 30 companies in the Dow Jones Industrials. The way this simple strategy works is that at the beginning of the year, dividend investors looked at all 30 Dow stocks and picked the 10 that had the highest dividend yields. They then invested an equal amount of money in all 10 stocks, with the intent to hold them throughout 2017. Those who expect to keep investing using the strategy will take another look at the Dow 30 at the beginning of 2018, seeing how their relative dividend yields changed and selecting a new top 10 to hold over the coming year.

The company generated $13.7 billion in operating cash flow in the fiscal year ended July 28, 2018, and it wasn’t shy about funneling that cash to investors. The idea is to make stock picking somewhat easy and relatively safe, the latter because the universe is limited to blue-chip stocks. As a tactic, Dogs of the Dow goes like this—after the stock market closes on the last day of the year, select the 10-highest dividend-yielding stocks in the DJIA. Then, on the first trading day of the new year, invest an equal dollar amount in each of them. Hold the portfolio for a year, then repeat the process at the beginning of each subsequent year. Three of ten top dividend-yielding Dow dogs were among the top ten gainers for the coming year based on analyst 1-year target prices.

They also discuss how an investor might incorporate the strategy into their portfolio. Having a sound investment strategy can help smooth out the turbulence in your portfolio and save you from getting caught up in a herd mentality of selling asian bond market review and outlook low into a down market. The average yield for the 2017 Dogs of the Dow is almost 3.6%, down slightly from 2016but closer to 2015’s Dogs. This 3.6% would compare to a yield of 2.44% for the 10-year Treasury and 3.06% for the 30-year Treasury.

Price Drops or Dividend Increases Could Get All Ten Dow Dogs Back to “Fair Price” Rates For Investors

Exxon ended 2016 with a dividend yield of 3.35% and its now cheap at 4.07%. Chevronclosed at $108.76 on Sept. 1, down 7.6% year-to-date, and 8.6% below its post-election high of $118.99 set on Dec. 12. The stock ended 2016 with a dividend yield of 3.67%, and it’s now cheap at 3.97%.

The Fund will invest at least 90% of its total assets in common stocks that comprise the Index. The Index is designed to provide exposure to dividend-paying equity securities in the Dow Jones Industrial Average™ by their 12-month dividend yield over the prior 12 months. Only securities with consistent dividend payments over the previous 12 months are included in the Index. The Dow Jones Industrial Average is a price-weighted index that is calculated as a simple average.

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