Dogs of the Dow - 2008 Projection

Each year, the Dogs-of-the-Dow are recalculated in January to find the 10 DJIA members with the highest dividend yield. This year there have been few changes to the names that look to be included in this strategy for 2008. Some of the reason is because of the problems that occurred in 2007 for some of the DJIA names. We also need to consider the fact that higher yielding stocks are concentrated within a small subset of the DJIA.

As we are seeing an immense level of volatility, it seems to be a good idea to look at a strategy that invests in companies that have (or at least seem to have) high quality and provide a decent dividend yield. The benefit to investors is that these are Mega-Caps and are considered “blue-chips.” The contrarian view which this strategy/screen is based on has often outpaced the DJIA. That is appealing in a time when there is such a great deal of uncertainty.

Below is the list of “Dogs” based on current prices and yields. The table also shows stocks which were included in 2007 and, by a process of elimination, reveals which stocks should be in the 2008 list.

Comments

[Aquater:]

This was like a non-thinking tease. No point in raising the topic and then leaving it without a modicum of handling it to a reasoned conclusion. If you can't think, why start the process?

2007 Nov 16 12:54 AM

[Andrew Horo...:]

Aquater:

Thanks for the comment, but what else do you want? The post was looking to identify the DOGS.... A simple strategy. The desire was to provide the list, not the strategy, that has been covered already by thousands of others. Quant theories do not require thought, that is the whole point. Have a good day.

2008 Jan 01 09:17 AM

[22thoroughbred:]

I think the '09 list will be very profitable, there is a UIT (unit investment trust) that buys all 10 as 1 trade and holds for 12 months (maybe 13 to avoid short term cap gains) and that is how I will buy this year...may be put out by First Trust advisors, but any broker can buy it...unless there is an ETF that I am missing. Be well and happy new year.

2008 Dec 29 02:39 AM