Last summer I read a book called “Beating the Dow”. Author Michael B. O’Higgins, the inventor of the Dogs of the Dow trading strategy, promises a “high-return, low risk” strategy that outperforms the Dow Jones Industrial Average.
The Dogs of the Dow is actually pretty simple and gives competitive returns. The basic theory is that you choose from the list of the 30 Dow companies: first by identifying the top 10 dividend yielding stocks and then amongst those 10: choose the 5 cheapest (based on the stock price) stocks. You now have a list of five stocks that are the ‘dogs’ of the Dow Jones Industrial Average.
Here is the list of dogs for the close of September 1, 2017. I put an X mark next to the top ten highest yielding stocks. Then, a ‘/’ mark next to the top 5 lowest priced stocks out of the 10 highest yielders. I highlighted the dogs which have both an ‘X’ and a ‘/’ marking.
| Sept.1 2017. | ||||
| Symbol | YIELD | Top 10 YIELD | CLOSE | 5 LOWEST PRICE |
| MMM | 2.308902 | 203.56 | ||
| AXP | 1.625261 | 86.14 | ||
| AAPL | 1.536117 | 164.05 | ||
| BA | 2.363417 | 240.33 | ||
| CAT | 2.637809 | 118.28 | ||
| CVX | 3.972049 | X | 108.76 | |
| CSCO | 3.591331 | X | 32.3 | / |
| KO | 3.232853 | X | 45.78 | / |
| DWDP | 2.73891 | 67.18 | ||
| XOM | 4.022463 | X | 76.57 | |
| GE | 3.818616 | X | 25.14 | / |
| GS | 1.328139 | 225.88 | ||
| HD | 2.361056 | 150.78 | ||
| INTC | 3.106298 | X | 35.09 | / |
| IBM | 4.164353 | X | 144.08 | |
| JNJ | 2.564298 | 131.03 | ||
| JPM | 2.345304 | 95.51 | ||
| MCD | 2.528002 | 159.81 | ||
| MRK | 2.945324 | 63.83 | ||
| MSFT | 2.109819 | 73.94 | ||
| NKE | 1.349325 | 53.36 | ||
| PFE | 3.585434 | X | 35.7 | / |
| PG | 2.982816 | X | 92.53 | |
| TRV | 2.402002 | 119.9 | ||
| UNH | 1.501877 | 199.75 | ||
| UTX | 2.374491 | 117.92 | ||
| VZ | 4.924875 | X | 47.92 | |
| V | 0.635226 | 103.9 | ||
| WMT | 2.603037 | 78.37 | ||
| DIS | 1.536946 | 101.5 | ||
| SEPTEMBER 1 2017 SYMBOL ‘DD’ BECOMES ‘DWMP’ | ||||
Here is the excel sheet I used to compile the list;
I plan on publishing the dogs of the dow for the past 10 years. I want to compare the yearly performance since 2006. The only thing that’s taking a long time is that I have to manually find the dividend payments on Yahoo finance individually. It should be ready soon, stay tuned!