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2012 Dogs of the Dow

Posted By Jim On 01/05/2012 @ 7:15 am In Personal Finance | 1 Comment

Dividend stocks have gotten a lot of attention lately and so have various “strategies” that involve them. The most well known dividend related investing “thing,” for lack of a better term, has been the dividend aristocrats list. That’s a list produced by S&P that tracks all the companies that have increased their dividends every year for at least 25 years.

Dogs of the Dow is one in which you invest in the highest yielding dividend stocks in the Dow. The logic behind the strategy is that you’re investing in stable blue chip companies, because they’re in the Dow, when they are at their weakest, when their prices are low.

There’s clearly no guarantee that this strategy always works, that the Dogs always outperform the market. In fact, after the strategy was announced, it proceeded to lag behind the market and that doesn’t even account for management fees. I think these lists are valuable in that it does give you a good starting point, like the dividend aristocrats, to start researching companies.

So who are 2012′s Dogs of the Dow?

  • AT&T (T [3])
  • Verizon (VZ [4])
  • Merck (MRK [5])
  • General Electric (GE [6])
  • Pfizer (PFE [7])
  • DuPont (DD [8])
  • Johnson & Johnson (JNJ [9])
  • Intel (INTC [10])
  • Proctor & Gamble (PG [11])
  • Kraft (KFT [12])

For the curious, Kraft is the lowest yielding stock of the Dogs (as of 12/30/11), at 3.10%, and AT&T is the highest at 5.82%. And there is some small overlap with the Dividend Aristocrats [13] AT&T, Johnson & Johnson, and Procter & Gamble make both lists.

Like any of these types of strategies, they work best when you formulate the strategy after you’ve seen the results.

(Photo: thinkpanama [14])


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[3] T: http://www.google.com/finance?q=t

[4] VZ: http://www.google.com/finance?q=vz

[5] MRK: http://www.google.com/finance?q=mrk

[6] GE: http://www.google.com/finance?q=ge

[7] PFE: http://www.google.com/finance?q=pfe

[8] DD: http://www.google.com/finance?q=dd

[9] JNJ: http://www.google.com/finance?q=jnj

[10] INTC: http://www.google.com/finance?q=intc

[11] PG: http://www.google.com/finance?q=pg

[12] KFT: http://www.google.com/finance?q=kft

[13] Dividend Aristocrats: http://www.bargaineering.com/articles/2012-sp-dividend-aristocrats.html

[14] thinkpanama: http://www.flickr.com/photos/23065375@N05/2247354510/sizes/m/in/photostream/

Thank you for reading!