Stock Screen: Dogs of the Dow

The Dogs of the Dow strategy seems to be a popular topic as Barron’s ran a feature article on the 2010 batch a few days after I ran this screen for premium members. Readers can find some useful background and historical results information from the Barron’s site [$].

The Dogs of the Dow is a well-known, simple strategy that selects the ten stocks in the Dow Jones Industrial Average with the highest yield. As members may suspect, we don’t believe in following any strategy blindly but it may be worthwhile to evaluate this year’s pack for possible opportunity.

The ten stocks are listed below:

  • AT&T Inc. (T)
  • Verizon Communications Inc. (VZ)
  • E. I. du Pont de Nemours and Company (DD)
  • Kraft Foods Inc. (KFT)
  • Merck & Co., Inc. (MRK)
  • Chevron Corporation (CVX)
  • McDonald’s Corporation (MCD)
  • Pfizer Inc. (PFE)
  • The Home Depot, Inc. (HD)
  • The Boeing Company (BA)

The Dow Jones contains thirty of the largest corporations in the US which means these stocks are well-followed by analysts and retail investors alike. Thus, one would not expect as much mispricing on an individual security basis (as opposed to a sector being mispriced due to being out of favor).

View the Dogs of the Dow valuation spreadsheet page.

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Read more on Dow Jones Industrial Average (DJI) at Wikinvest

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