The 2008 Dogs of the Dow

The Dogs of the Dow delivered stellar results in 2006 with a gain of 24.8% and there was a lot of investor interest in the dogs at the start of 2007. Interestingly the stocks that comprised the 2007 dogs were exactly the same stocks that made the list in 2006 and given their performance in 2006, could hardly be called dogs. As I mentioned in the January 2007 edition of SINLetter, I decided to abstain from the dogs in 2007 with the single exception of Pfizer (PFE) since I already had the stock in my personal portfolio.

My lack of enthusiasm for the Dogs of the Dow theory in 2007 was well founded as the dogs delivered a loss of 1.38% in 2007, underperforming the Dow Jones Industrial Average by a significant margin as you can see from this page.

Citigroup (C) tops the 2008 Dogs of the Dow list with a high dividend yield of 7.3% but is expected to cut its dividend by almost 40%. After a gain of 33.28% in 2007, Merck (MRK) with its 2.6% dividend yield was displaced from the list by Home Depot (HD) with its 3.4% dividend yield. The entire list of the 2008 dogs is given below.

2008 Dogs of the Dow*

Dog	Symbol	Price	Dividend Yield	P/E	P/S
Citigroup	C	$29.44	7.3%	7.92	1.81
Pfizer	PFE	$22.73	5.6%	10.76	3.21
Verizon	VZ	$43.69	3.9%	23.19	1.67
Altria	MO	$75.58	3.9%	15.13	2.34
AT&T	T	$41.56	3.8%	21.73	3.38
General Motors	GM	$24.89	3.8%	NA	0.07
DuPont	DD	$44.09	3.7%	12.42	1.44
JP Morgan Chase	JPM	$43.65	3.5%	9.12	3.01
Home Depot	HD	$26.94	3.4%	11.24	0.72
General Electric	GE	$37.07	3.3%	17.27	2.38

* Ordered by dividend yield on December 31, 2007