Dogs of the Dow: Definition, How It Works, 2022 Members
The weekly chart for IBM is neutral with the stock above its five-week modified moving average of $150.97 and below its 200-week simple moving average of $161.03, which was tested as the reversion to the mean two months ago. The 12x3x3 weekly slow stochastic reading ended November flat at 49.46. The 12x3x3 weekly slow stochastic reading ended November flat at 68.12. Small and medium-sized amana capital review companies may have more limited liquidity and greater price volatility than larger companies. Investments in foreign securities may involve political, economic, and currency risks, greater volatility, and differences in accounting methods. The Focus, Total Return, Balanced, Large Cap Financial, Small Cap Financial, and Midstream Funds are considered non-diversified funds.
The Dogs of the Dow is an investing strategy that focuses on dividends. Procter & Gamble, which boasts a dividend yield of 3 percent, is one attractive “dog,” said Matt Maley, equity strategist at Miller Tabak. But IBM might have been sold off too hard in 2018, and its fat 5%-plus yield and cheap price (8.7 times 2019 earnings estimates as of the start of the year) might have been too much for investors to ignore. Procter & Gamble is a Dividend Aristocrat – a title bestowed upon S&P 500 companies that have raised their dividends each year for at least 25 years or more.
- The Dogs of the Dow is an investing strategy that focuses on dividends.
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- “While they have produced similar returns over that 12-year period, some individual years have seen quite a divergence in performance,” says Johnson.
- Cisco has a reasonable P/E ratio of 16.05 and a dividend yield of 3.57%, which ranks sixth among the Dow 30.
The 12x3x3 weekly slow stochastic reading is projected to end this week at 84.82, above the overbought threshold on 80.00. The 12x3x3 weekly slow stochastic reading declined to 73.50 at the end of November. The 12x3x3 weekly slow stochastic reading ended November declining to 56.76. Each year, a new portfolio of stocks is chosen, using the closing price on the last day of trading for the previous year. Some of the stocks might remain the same; some companies will be replaced by new dogs.
The weekly chart for Cisco is positive but overbought with the stock above its five-week modified moving average of $35.13. The stock is above its 200-week simple moving average of $28.47, which is the reversion to the mean, last tested during the week of Feb. 12, 2016 when the average was $23.61. The 12x3x3 weekly slow stochastic reading ended November at 88.28, well above the overbought threshold of 80.00.
Dividend-Yield Strategies: A New Breed of Dogs
Exxon is structured to endure tough times in the oil patch, but also thrive should prices significantly rebound. Also important is that XOM has raised its payout for 36 consecutive years. While many of its competitors were merely maintaining their dividends during the 2014 bear market in oil, Exxon continued to up the ante – and should continue to do so for more years to come. Cisco pays out $1.32 per share in annual dividends, yet earnings are expected to reach $3.04 per share in the current fiscal year. That’s a payout ratio of just 43%, meaning Cisco has plenty of room to sustain and grow its dividend.
His research suggested that by selecting the 10 highest dividend-yielding DJIA stocks, he believed, that an investor could potentially outperform the overall market, as measured by the DJIA. Cisco is a market leader in business networking solutions and is seeing significant growth in its cloud services operations. Furthermore, the tech giant is making AI a priority moving forward, as indicated by its acquisition of MindMeld last week— a purchase that sent CSCO stock down nearly 3% for the week. Technically, VZ stock is trading near annual lows, but price support has been firm in the $45 region. With an impressive yield and strong prospects for the rest of 2017, this consolidation period may be the perfect time to add this dog of the Dow to your portfolio.
Buy Cisco Systems down to my semiannual pivot at $41.15 as the stock becomes one of the ‘Dogs of the Dow’ for 2019. If we buy the $23 strike for $8.15, we are out $815 rather than the $3,075 we would spend for 100 shares of CSCO. We can buy one options contract, which is equivalent to 100 shares of CSCO, for roughly $8.15, if not cheaper. Remember, always use a limit order – never buy at the ask price, which in this case is $8.45.
The downside of Dogs of the Dow
To see which Dow stocks would be one of the Dogs of the Dow today, try Current Doggishness. You can also easily track the performance of this year’s Dogs of the Dow with our Daily Year-to-Date Performance Tables. Diversification does not eliminate the risk of experiencing investment losses. The ALPS Sector Dividend Dogs ETF seeks investment results that replicate as closely as possible, before fees and expenses, the performance of the S-Network Sector Dividend Dogs Index .
The following table lists the ten highest yielding Dow stocks as of the close on December 31, 2016. Of these ten Dow stocks, the five stocks with the lowest closing price are the 2017 Small Dogs of the Dow. For more information on how the Dogs of the Dow equiti broker review are selected, try Dog Steps. All investments are subject to risks, including the loss of money and the possible loss of the entire principal amount invested. Additional information regarding the risks of an investment is available in the prospectus.
The tariff situation and weak local overseas currencies could squeeze earnings in 2019. No matter the approach, we can continue to sell calls against our LEAPS contract every month or so to lower the total capital outlay. But remember, options have a limited life, so when we get closer to the LEAPS contract’s expiration we will simply sell the contract and use the proceeds to continue our unique options strategy. Our total outlay or risk now stands at $3,005 ($3,075 LEAPS contract minus $70). At first, the premium seems small, but on a percentage basis selling the 31 call for $70 reaps a return on capital of 2.3% over 60 days. At the beginning of 2018 you have a rare opportunity to vastly increase your income using what might be thesimplest investment strategy ever.
The 8 ‘Dogs Of The Dow’ Continue To Lag The Dow This Year
The company juiced its payout by 43% in 2018 to 80 cents per share, helping keep aloft a now 3%-plus yield. The company’s Keytruda – a cancer treatment that has proven to reduce the risk of death when used with chemotherapy – has been vital to the company’s success. Keytruda sales doubled to $5 billion during the first three quarters of 2018, and revenues from the drug are projected to top $10 billion within a few years.
But there’s only one other stock with double-digit gains among the 10 Dogs of the Dow. That compares to 11 of the 20 non-Dog Dow stocks with gains of 10% or more so far in 2017.
After holding the stocks for a year, repeat the process by starting at step one and identifying which companies currently make the list. Next you will reallocate your portfolio by selling stocks that no longer appear on the list and replacing them with any new ones that do. On Dec. 31, start by pulling a list of the Dow 30 and rank each company according to its dividend yield. To obtain this list in just a few clicks, consider using a stock screener. The members of the Dow are well-established, blue chip companies.
The following table presents the 2017 Dogs of the Dow performance plus the performance all Dow 30 components. In addition to stock price and 2017 percent change, the current dividend yield is included for each Dow stock. 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. To be notified the instant that the official Dogs of the Dow are revised, sign up to receive the free Dogs of the Dow Newsletter.
Therefore, it would not necessarily sell or buy a security unless that security is removed from or added to the underlying index, respectively. A blended portfolio of SDOG and OUSA may provide an optimal large cap mix that can reduce the portfolio volatility that tends to accompany high dividend strategies. Carefully consider the investment objectives, risks, charges and expenses of ProShares before investing. This and other information can be found in their summary and full prospectuses.
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Trading in securities involves risks, including the risk of losing some or all of your investment. Hypothetical or modeled portfolio results do not represent the results of an actually invested portfolio and are not back-tested for accuracy under actual, historical market conditions. There can be tax consequences to trading; consult you’re your tax adviser before entering into trades. For additional WIR disclosures and policies, please click the links below. The strategy involves investing in the 10 highest dividend yielding stocks, within the Dow, at the beginning of the year.
The formula-based strategy employed by some Funds may cause those Funds to buy or sell securities at times when it may not be advantageous. Given these charts and analysis, my trading strategy is to buy weakness to my semiannual value level of $41.15 and reduce holdings on strength to the 200-day simple moving average at $44.77. With a dividend yield of 3.57% a starter position is justified as the stock will be one of the eight “Dogs of the Dow” in 2019. The strategy proposes that an investor annually select for investment the ten stocks listed on the Dow Jones Industrial Average whose dividend is the highest fraction of their price, i.e. stocks with the highest dividend yield.
For example, the ten stocks that belonged to the 2019 Dogs of the Dow list came from only seven sectors, including technology, energy, and healthcare, in contrast to the S&P 500 Index which covers eleven sectors. Verizon ended 2016 with a dividend yield of 4.35%, and it’s now 4.67%, still the cheapest Dow stock by this smart e-commerce personalization measure. That will make the Dogs of the Dow look a lot different than they did in 2017. With its perennial value focus, the Dogs always do well when hard-hit dividend stocks manage to bounce back more than their peers. In 2017, the way the entire market did so well simply proved too much for the Dogs to surpass.
P&G was the target of a sustained campaign in 2017 by activist investor Nelson Peltz, who claimed the company’s management structure was contributing to lackluster share performance. Peltz, who ultimately was admitted to the Procter & Gamble board in March 2018, may be having an impact. PG provided a bit of refuge to investors in 2018 by notching a market-beating 1.4% gain on top of a 3.1% dividend. On the first trading day of January, take the total amount that you’re investing and invest 10% into each of the 10 stocks. If you’re investing $10,000 then you would have $1,000 in each of the stocks. ExxonMobil closed at $83.35 on Oct. 31, down 7.7% year-to-date, and in correction territory, 10.6% below its postelection high of $93.21 set on Dec. 13.