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Investors benefit from having a clear investment strategy, following rules with more or less success. One popular and oft-discussed strategy is the Dogs of the Dow theory by Michael O'Higgins. The strategy is to buy 10 stocks of the Dow Jones with the highest dividend yields and lowest price-to-earnings ratios at the beginning of the year 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 the new Dogs. Compared to the previous results of the Dogs of the Dow from a month ago, Chevron (CVX) and The Travelers Companies (TRV) have replaced Procter & Gamble (PG) and Kraft Foods (KFT).

I screened the Dow Jones index for Dogs and sorted the results by lowest forward P/E ratio. Here are the 3 top Dogs of the Dow by forward price-to-earnings ratios:

1. Chevron works within the major integrated oil and gas industry. The company has a market capitalization of $183.3 billion, generates revenues in the amount of $233.0 billion and has a net income of $23.0 billion. Its following P/E ratio is 8.0 and forward price-to-earnings ratio 6.9, Price/Sales 0.8 and Price/Book ratio 1.6. Dividend Yield: 3.4 percent. The expected growth for next year amounts to -0.3 percent, and 6.8 percent for the upcoming 5 years.

2. Pfizer (PFE) acts in the major drug manufacturing industry. The company has a market capitalization of $138.6 billion, generates revenues in the amount of $67.2 billion and has a net income of $8.6 billion. Its following P/E ratio is 16.6, and forward price-to-earnings ratio 7.8, Price/Sales 2.1 and Price/Book ratio 1.6. Dividend Yield: 4.5 percent. The expected growth for next year amounts to 1.8 percent, and 3.7 percent for the upcoming 5 years.

3. The Travelers Companies works within the property and casualty insurance industry. The company has a market capitalization of $20.2 billion, generates revenues in the amount of $25.5 billion and net income of $2.4 billion. Its following P/E ratio is 9.5 and forward price-to-earnings ratio 8.1, Price/Sales 0.8 and Price/Book ratio 0.8. Dividend Yield: 3.4 percent. The expected growth for next year amounts to 52.3 and 8.6 percent for the upcoming 5 years.

Take a closer look at the full list of Dogs of the Dow. On average, the 10 Dogs of the Dow have a dividend yield of 4.29 percent and a forward price-to-earnings ratio of 9.61. The average price-to-book ratio amounts to 1.95 and price-to-sales is 1.53.

Source: 3 Cheapest 'Dogs Of The Dow' By Forward P/E