The Dogs of the Dow Can Keep You Out of the Doghouse

It’s the holiday season and if you are a bonehead, it is easy to forget to show your significant other how much you care.

The only dogs you want to be near this time of year are the Dogs of the Dow:

Pfizer Inc (PFE) 7.77% dividend yield

Bank of America (BAC) 7.55% dividend yield

Alcoa Inc. (AA) 7.12% dividend yield

General Electric (GE) 6.97% dividend yield

DuPont (DD) 6.22% dividend yield

Merck & Co Inc. (MRK) 5.78% dividend yield

Verizon Comm (VZ) 5.52% dividend yield

AT&T (T) 5.49% dividend yield

Kraft Foods Inc. (KFT) 4.30% dividend yield

Caterpillar (CAT) 3.96% dividend yield

Watch this video to make sure you stay out of the doghouse…

Disclosures: None

Comments

[MikeLovesGold:]

Won't they have to cut their dividends?

2008 Dec 10 10:19 AM

[MikeLovesGold:]

Won't they have to cut their dividends?

2008 Dec 10 10:20 AM

[Gwhitebeard:]

Even if some dividends are cut the price still offers solid returns. However, even better is the daily volaility that these stocks offer. These stocks provide great intraday movement, liquidity, and are relatively safe to hold short term due to being DOW components. Trade, Trade, TRADE!

2008 Dec 10 02:42 PM

[Ricard:]

One word:

WOOF!!!

2008 Dec 10 11:57 PM

[Dividend Gr...:]

Didn't Dogs of the Dow significantly underperform major indexes by 20% in 2008?

The only period for which Dogs of the Dow made any more money than a simple buy and hold index funds strategy, was when the DOD strategy was being backtested.

2008 Dec 11 01:57 PM

[drone:]

Don't get me started on GE. Here is a company that could be demoted to snakes of the Dow or weasels of the Dow due to its lying, deceptive, unscrupulous management. Staggering around semiconscious with a scruffy piece of paper in their hands that reads "AAA"

2008 Dec 11 04:21 PM

[dawase@gmai...:]

Yield seekers have gotten crushed this year... especially in the last half. Witness the flood of capital into Treasuries even at virtually zero nominal yields and even possibly negative real yields which continues even now.

Eventually the spreads we see to the risk-free curve will shrink. It's a question of when not if. However, the time frame is anyone's guess. In the meantime, dividend cuts are a real risk and the outcome would be not only a loss of income, but potentially and likely a reduction of principal as well as yield-seekers flee the issue.

I would think if you're looking for a short-term place to hide the preferreds are a better bet than the DotD.

2008 Dec 11 04:50 PM

[chicko:]

one year from today when you see alcoa trading at 35 dollars you will kick your self in the face its a good company and as cramer said buy buy buy

2008 Dec 12 12:07 PM

[chicko:]

one year from today when you see alcoa trading at 35 dollars you will kick your self in the face its a good company and as cramer said buy buy buy

2008 Dec 12 12:08 PM