Dogs of the Dow in the Dumpster

Not surprising to readers of World Beta, the Net Payout Yield strategy is beating all the dividend strategies this year (and did so in 2007 as well). Before you leave any comments please read the background posts on net payout yield - it is NOT dividend yield.

Flying Five (Link to original post here.)
Dogs of the Dow (Link to original post here.)
Net Payout Yield (Link to original post here.)

Dogs of the Dow is simply the top ten stocks in the Dow sorted by dividend yield.
Flying Five further sorts those by lowest price.
Net Payout Yield is the top ten Dow stocks sorted by net payout yield.

For the past 30 years or so the Dogs strategy has outperformed the DOW by ~ 3% per annum, and the Net Payout Yield strategy another 3% on top of that (ditto for Flying Five). But are the results simply data mining? The NPY strategy certainly sits the best with me of any of them.

All three performed below the DJIA Index in 2007:

DOW: 6.43%
DOGS: 2.22%
Flying Five: 4.18%
NPY: 6.3%

The 2008 names and YTD performance for Dogs, Flying Five, and Payout Yield are below:

DOW: -17.7%

Dogs of the Dow, -20.14%:
Citigroup (C)
Pfizer (PFE)
GM (GM)
Altria (MO)
Verizon (VZ)
AT&T (T)
DuPont (DD)
J.P. Morgan (JPM)
GE (GE)
Home Depot (HD)

Flying Five, -27.93%:
PFE
GM
HD
C
GE


Payout Yield, -13.57%:
HD
IBM (IBM)
Honeywell (HON)
Disney (DIS)
PFE
JPM
Alcoa (AA)
C
Exxon (XOM)
Hewlett Packard (HPQ)

Here is a screen for net payout yield stocks, and the top ten right now are:

HD
AA
PFE
XOM
Boeing (BA)
T
GE
McDonald's (MCD)
Caterpillar (CAT)
GM

Comments

[kurt walter:]

C and GM are real dogs of the dow.

2008 Sep 17 05:58 PM

[WEBISKING:]

If you buy MO PM KO JNJ and KFT you will outperfrm the market while taking into account reinvested divdends

2008 Sep 19 07:16 AM

[Outtanames999:]

All trading strategies have their day in the sun and then their day of darkness follows, often forever more.

2008 Sep 19 10:41 AM

[Stone Fox C...:]

Its unreal that Boing now has a yield of 12%. Have you done any work on adjusting the stocks on a monthly basis versus yearly? It seems ideal to drop IBM and add BA at this point.

2008 Sep 23 02:31 PM

[Stone Fox C...:]

Make that Boeing

2008 Sep 23 02:32 PM

[Dogs of the...:]

You can find a list of the Dow 30 stocks and their current dividend yield at stocktradingguru.blogs...

2008 Nov 26 06:16 PM