“Dogs of the Dow” for 2010 and an Update of the 2009 Pooches

January 4, 2010 3:00 pm

The Disciplined InvestorEach year, the Dogs-of-the-Dow are recalculated in January to find the 10 DJIA members with the highest dividend yield. This year there have been few changes to the names that look to be included in this strategy for 2010. We also need to consider the fact that higher yielding stocks are concentrated within a small subset of the DJIA as fewer than the 30 pay dividends.

During times of heightened volatility, many investors look for strategies that invest in companies that have (or at least seem to have) a higher quality and provide a decent dividend yield. The benefit to investors is that these are often Mega-Caps and are considered “blue-chips.”

The contrarian view which this strategy/screen is based on has often outpaced the DJIA. That is appealing in a time when there is such a great deal of uncertainty.

Below is the list of “Dogs” based on current prices and yields. The lower table also shows stocks which were included in 2009 along with performance etc. Note that in 2009, the Dogs lagged the DJIA.

**In the the book, The Disciplined Investor – Essential Strategies for Success, there are several screens and an entire chapter devoted to the subject of Quantitative investing.

(Click each to enlarge)

Dogs 2010

Dogs 2009

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Disclosure: Horowitz & Company clients may hold positions of securities mentioned as of the date published.

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Each year, the <strong>Dogs-of-the-Dow</strong> are recalculated in January to find the 10 DJIA members with the highest dividend yield. This year there have been few changes to the names that look to be included in this strategy for 2008. Some of the reason is because of the problems that occurred in 2007 for some of the DJIA names. We also need to consider the fact that higher yielding stocks are concentrated within a small subset of the DJIA.

As we are seeing an immense level of volatility, it seems to be a good idea to look at a strategy that invests in companies that have (or at least seem to have) high quality and provide a decent dividend yield. The benefit to investors is that these are Mega-Caps and are considered “blue-chips.” The contrarian view which this strategy/screen is based on has often outpaced the DJIA. That is appealing in a time when there is such a great deal of uncertainty.

Below is the list of “Dogs” based on current prices and yields. The table also shows stocks which were included in 2007 and, by a process of elimination, reveals which stocks should be in the 2008 list.
<div style=”text-align: center;”><img title=”Dogs 2008″ src=”http://www.thedisciplinedinvestor.com/blog/wp-content/uploads/2007/11/dogs20081.jpg” alt=”Dogs of the Dow” width=”567″ height=”253″ /></div>
<div style=”text-align: left;”><em>The Disciplined Investor </em>has many more screens and teaches readers how to use the MSN Money Screening tool among others.</div>
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<em>Disclosure: Horowitz &amp; Company clients may have long and/or short positions in the securities mentioned.</em>

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