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Looking for well-known high dividend stocks? The Dogs of the Dow strategy advocates buying the 10 Dow dividend paying stocks with the highest dividend yield. This week we narrowed this group down to 5 stocks with the highest dividend yields and the highest option yields. As usual, there are mixed metrics among the group:

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Verizon's (NYSE:VZ) ROE, (Return On Equity), of just 1.08, looks particularly flea-bitten, when compared to the rest of the pack.

Valuation metrics:

While the long-term PEG ratios for these stocks aren't very compelling, the next year PEG's for 2 of them, Merck (NYSE:MRK) and Kraft (KFT), look attractive, as they're below 1. This plays into the idea of a shorter term strategy, such as selling Covered Calls or Cash Secured Puts, with Feb. - April expiration dates.

The basic Covered Call option yields for these dividend stocks are listed below. We've listed the complete info for these trades, including expiration dates, and the additional potential price gains, in our Covered Calls table.

The Cash Secured Put options for these stocks also currently offer high options yields:

We've added these trades this week to our Cash Secured Puts Table, where you'll find more details.

Disclosure: Short T calls and puts, and long T shares

Source: Top Five Dogs of the Dow - Highest Dividend Stocks and Options Yields