The stock ended 2016 with a dividend yield of 3.57%, and it’s now 3.35%. Chevron closed at $115.89 on Oct. 31, down 1.5% year-to-date and up 13% from its postelection low of $102.55 set on June 7. The legacyfx review stock ended 2016 with a dividend yield of 3.67% and it is now 3.73%. Cisco Systems closed at $34.15 on Oct. 31, up 13% year-to-date and 17.3% above its postelection low of $29.12 set on Dec. 2.

Sure, General Electric pays out a respectable dividend yield of 3.4%, but the company also is in the middle of a transition toward the modern marketplace and has considerable growth prospects. In fact, GE has grown into a market leader in the industrial internet of things, providing IoT solutions for geotracking elliott wave software land surveying, automated worksite monitoring and even autonomous construction solutions. The “Dogs of the Dow” investment strategy is typically a year-end/year-beginning phenomenon, but today I want to show you how this income-centric tactic can do wonders for you as we near 2017’s midway point.

What is the Dogs of the Dow?

The 12x3x3 weekly slow stochastic reading is projected to end this week at 38.73 down from 46.35 on Dec. 21. The weekly chart for Verizon is negative with the stock below its five-week modified moving average of $48.40 and below its 200-week simple moving average of $48.85, which is the reversion to the mean, last tested this week. The 12x3x3 weekly slow stochastic reading is projected to decline to 66.58 this week, down from 77.02 on Oct. 27. The weekly chart for IBM is positive with the stock above its five-week modified moving average of $150.75 and below its 200-week simple moving average of $161.70, which was tested as the reversion to the mean the past two weeks. The 12x3x3 weekly slow stochastic reading is projected to rise to 65.90 this week, up from 61.46 on Oct. 27.

• Is leading the entire Dow with gains of more than 25%, thanks largely to the success of the commercial aerospace industry in recent years.
• Summary data (e.g. 2017 percent change and dividend yield) for the Dogs of the Dow, Small Dogs of the Dow, Dow 30, and Dow Jones Industrial Average are included below.
• The outlook for the No. 5 Dog of the Dow remains the same — expect the shares to languish in the $82-$83 region while oil prices remain questionable.
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Boeing ended 2016 with a dividend yield of 3.65%, and it’s now only 2.34%, so it’s no longer a dividend play. 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.

Choosing the Dogs of the Dow

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 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. It is important to note, however, that because of the lack of diversification in a Dogs of the Dow portfolio of 10 stocks, investors could be taking on significantly more risk versus a simple S&P 500 index fund. While the concept of the Dogs of the Dow strategy is fundamentally sound, investors will need to carefully weigh the level of risk they’re willing to take versus their expected reward.

Registered Investment Companies are required by the IRS to distribute substantially all of their income and capital gains to shareholders at least annually. For specific tax advice, we recommend you speak with a qualified tax professional. LEAPS, or long-term equity anticipation securities, are basically options contracts with an expiration date longer than one year. LEAPS are no different than short-term options, but the longer duration offered through a LEAPS contract gives an investor the opportunity for long-term exposure. These are the 10 highest-yielding stocks in the Dow Jones Industrial Average.

Chevron ended 2016 with a dividend yield of 3.67% and now it’s 3.63, still within the top 8. Cisco Systems ended 2016 with a dividend yield of 3.84%, and it is now yielding 3.35%, still in the top 8. Both of the Dow’s energy stocks are among the Dogs this year, and with oil sagging again, both stocks are down almost 10% so far this year. The stock market is climbing, but this popular strategy is going nowhere. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.

The company is the leader in strategies such as dividend growth, interest rate hedged bond and geared ETF investing. ProShares continues to innovate with products that provide strategic and tactical opportunities for investors to manage risk and enhance returns. This focuses on paying a price for a stock that is less than its net short-term assets. If you love dividends this strategy can even include high-paying dividend stocks likely to appreciate in value. When we open in 2018, I will likely show limited upside as the year begins. Perhaps this implies that investors will be considering raising cash once tax reform is in place for the new year.

Pfizer closed at $35.06 on Oct. 31, up 7.9% year-to-date and is 17% above its postelection low of $29.96 set on Nov. 8. The stock ended 2016 with a dividend yield of 3.94% and it’s now it’s 3.82%. International Business Machines had a close of $154.06 on Oct. 31, down 7.2% year-to-date, and in correction territory, 15.7% below its postelection high of $182.79 set on Feb. 16. The stock ended 2016 with a dividend yield of 3.55% and it’s now cheap at 4.02%. Boeing closed at $257.98 on Oct. 31, up 65.7% year-to-date, and in bull market territory, 82.6% above its postelection low of $141.29 set on Nov. 8. The stock ended 2016 with a dividend yield of 3.65%, and it’s now only 2.43%, so it’s no longer a dividend play.

One way to do this is to revisit the Dogs of the Dowinvestment strategy. The premise of the Dogs strategy is to buy the 10 Dow stocks with the highest yield in December, then hold them through the end of the year. While not a fail-proof investment strategy, it has outperformed the Dow Jones itself for the past seven years.

And its current dividend yield of 4.6% is at historically high levels, suggesting that investors have oversold the shares in response to Q4 2018’s big decline in oil prices. 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 8 ‘Dogs Of The Dow’ Outperformed The Average In November, But Lag For The Year

But they are not immune to the normal business cycles of expansion and contraction. Where a company is in its business cycle can have a big impact on its stock price, which often peaks when it is at the top and troughs when it is near the bottom of the cycle. The Dogs of the Dow was popularized in 1991 when Michael B. O’Higgins published his book, “Beating the Dow.” The term “dog” refers to stocks that have fallen out of favor.

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 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.

Dogs of the Dow: International Business Machines (IBM)

The good news for Chevron is that the summer driving season is upon us, and sure to lift demand and oil prices. Furthermore, recent weakness in the U.S. economy is believed to be a minor blip in the road, with even the Fed showing confidence by all but promising a rate hike next month. This article on The Dogs of the Dow was written by Net Net Hunter member Bryan Shealy.

The strategy requires identifying those stocks and buying them at the end of a calendar year. Then, in one year’s time, you repeat the process, selling stocks that no longer meet the threshold and replacing them with ones that do. While it has had some measure of success, investors should be cautious around their level of risk and diversification. Since 2000, the Puppies have tended to top the Dogs when it comes to market performance with an annual return of slightly over 10% versus the Dogs’ 8.6%, according to Dogsofthedow.com.

The Dogs of the Dow, popularized by Michael Higgins in his book “Beating the Dow,” is an investment style popular with investors who like to keep things simple. G. Schneider was published in The Journal of Finance in 1951, based on selecting stocks by their price–earnings ratio. The Dogs of the Dow is an investment strategy popularized by Michael B. O’Higgins in a 1991 book and his Dogs of the Dow website. Coca Cola ended 2016 with a dividend yield of 3.57%, and it’s now 3.41%, still in the top 8.

Even better, at 63 consecutive years of dividend growth, P&G is elite company – only a handful of Aristocrats have improved their payouts for a half-century or more. Dividend yields are calculated by annualizing the most recent quarterly payout and dividing by the share price. Depending on how the market performs, some stocks may remain a dog for a few years. One example is Verizon, which has appeared on the Dogs of the Dow each year since 2010. The company has only gained an average of 9.5% per year over that span. The Dogs of the Dow for 2022 are calculated by taking the share price and dividend yield from December 31, 2021.

An alternative technique, if you wish to participate on a continued upside move in CSCO, is to buy two leaps in the stock and only sell one call against it. This strategy will increase your deltas and allow half of your position to participate in a move past $31. I like to go out 30 to 60 days when selling premium types of developers against my LEAPS contract. Let’s sell the January 31 strike with 60 days left until expiration. I started a LEAPS-based Dogs and Small Dogs portfolio at the onset of 2017 and the results so far have been . First, IBM is seeing strong growth in its cloud computing division, which jumped 33% last quarter.

With the stock trading at $30.75, I prefer to buy a contract that is in the money at least 10%, if not more. For the options geeks out there, I like to buy a LEAPS contract with a delta of around 0.80. With the Small Dogs of the Dow, one simply takes the five lowest-priced Dogs of the Dow stocks and invest an equal sum in each stock. If you don’t already own the shares, GE stock’s price weakness offers a perfect opportunity to dive in.