The Dogs of the Dow is an investing strategy where income investors essentially bet on beaten-down blue chip dividend stocks in the Dow Jones Industrial Average.
First popularized in the early 1990s, the Dogs of the Dow is supposed to deliver superior risk-adjusted returns vs the DJIA. Although the Dogs of the Dow has a mixed track record in that regard, at least it's dead simple to follow: buy the 10 Dow stocks with the highest dividend yields in the average at the end of December, and then hold them for one year.
The idea behind the Dogs of the Dow is that investors are using the highest dividend yields as proxies for valuation. Recall that a dividend stock's yield rises as its price falls. The Dow Jones stocks with the highest dividend yields should theoretically be bargains, what with their depressed share prices and all.
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With the end of the year approaching, it's time for followers of the Dogs of the Dow strategy to rebalance their portfolios. Below please find the 10 Dogs of the Dow for 2024, listed by dividend yield as of December 22.
| Dow stock | Ticker | Dividend yield |
|---|---|---|
| Walgreens Boots Alliance | WBA | 7.37% |
| Verizon Communications | VZ | 7.11% |
| 3M | MMM | 5.68% |
| Dow | DOW | 5.09% |
| International Business Machines | IBM | 4.13% |
| Chevron | CVX | 4.01% |
| Amgen | AMGN | 3.22% |
| Coca-Cola | KO | 3.17% |
| Cisco Systems | CSCO | 3.14% |
| Johnson & Johnson | JNJ | 3.07% |
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