A New Year and new Dow Dogs
By Dian Vujovich
Sorry that Iâm a few days late in getting this yearâs listing of Dogs of the Dow stocks to you, but thatâs okay: Given that the first two trading days of 2015 havenât been anything to crow about, investing in the 10 stocks that make up this litter might not be such a bad thing.
Before going to the list, the Dog investment strategy isnât a perfect one but it sure is worth noticing. In 2014, for example, the Dow Dogs beat their benchmark, which, I might add, is something worth howling about given that active and/or professional money managers often arenât able to do that—but the Dogs did. According to the Bespoke Investment Group, the Dogs of the Dow returned 10.8 percent, including dividends, to investors who followed the put-equal-amounts-of-money-into-DJIAâs-10-highest-dividend-paying-stocks theme outperforming the DJIAâs 10 percent, including dividends, return.
So while 2014 returns werenât as great as say the S&P 500âs total return of 13,69 percent was the Dogs still did good.
Theyâve also got a respectable longer-term track record beating the DJIAs performance on average by about 1.3 percent over the last 14 years with the Dogs total average return of 8.9 percent and the DJIAs of 7.6 percent.
The 2015 Dogs of the Dow list, beginning with the highest yielding stocks, includes these 10 companies: AT&T (T); Verizon (VZ); Chevron (CVX); McDonalds (MCD); General Electric (GE); Pfizer (PFE); Merck (MRK); Caterpillar (CAT); Exxon Mobil (XOM) and Coca-Cola (KO).
Itâs an interesting group of well-known breeds making up this yearâs list that have only begun to run. Since Iâm a fan of this strategy, Iâm routing for them.
On the other hand, if you donât like these Dogs but enjoy investing in the highest yielding stocks among various sectors, the ALPS Sector Dividend Dogs ETF (SDOG) is a way to play a similar game.
Good luck.
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