3 Top Dogs Of The Dow

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Includes: MRK, T, VZ
by: Dividend Screen

Dogs of the Dow is an investment strategy popularized by Michael O'Higgins. The strategy is to buy 10 stocks of the Dow Jones with the highest dividend yield and lowest price to earnings ratio at the beginning of the year or any trading period and to hold these stocks for a year. After this period, the investor should sell stocks that are no longer Dogs of the Dow and buy new Dogs of the Dow.

I screened the Dow Jones Index by dogs and sorted the results by dividend yield. Here are the 3 top Dogs of the Dow:

1. AT&T (NYSE:T) is acting within the domestic national telecom services industry. The company has a market capitalization of USD 172.1 billion, generates revenues in an amount of USD 125.7 billion and a net income of USD 19.6 billion. It follows P/E ratio is 8.8 and forward price to earnings ratio 11.4, Price/Sales 1.4 and Price/Book ratio 1.5. Dividend Yield: 5.9 percent. Years of Consecutive Dividend Increasing: 6 Years. 5-Year Dividend Growth: 5.4 percent. The company paid dividends since 1881. The expected growth for next year amounts to 7.2 and 5.9 percent for the upcoming 5 years.

2. Verizon (NYSE:VZ) is acting within the domestic national telecom services industry. The company has a market capitalization of USD 101.2 billion, generates revenues in an amount of USD 107.4 billion and a net income of USD 6.4 billion. It follows P/E ratio is 16.0 and forward price to earnings ratio 13.7, Price/Sales 0.9 and Price/Book ratio 2.6. Dividend Yield: 5.5 percent. Years of Consecutive Dividend Increasing: 6 Years. 5-Year Dividend Growth: 3.8 percent. The company paid dividends since 1984. The expected growth for next year amounts to 16.5 and 8.5 percent for the upcoming 5 years.

3. Merck (NYSE:MRK) is acting within the major drug manufacturing industry. The company has a market capitalization of USD 98.3 billion, generates revenues in an amount of USD 47.0 billion and a net income of USD 4.3 billion. It follows Price/Earnings ratio is 23.1 and forward price to earnings ratio 8.3, Price/Sales 2.1 and Price/Book ratio 1.8. Dividend Yield: 4.8 percent. Years of Consecutive Dividend Increasing: 0 Years. 5-Year Dividend Growth: 0 percent. The company paid dividends since 1935. The expected growth for next year amounts to 3.2 and 4.8 percent for the upcoming 5 years.

Take a closer look at the complete list of the 10 cheapest stocks from the Dow Jones Industrial Average Index – Dogs of the Dow. Such companies have the highest dividend yield and offer the lowest expected price earnings ratio. In average, the 10 Dogs of the Dow have a dividend yield of 4.25 percent and a forward price to earnings ratio of 10.84. The average price to book ratio amounts to 2.14 and price to sales ratio is 1.70.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.