Dogs Of The NYSE International 100 Index 2011 Review

by: Fredrik Arnold

To determine the best of the best dividend stocks, many investors rely on a once per year trading system triggered by yield, called the "Dogs of the Index" strategy. This strategy gives the investor the tactical advantage of obtaining all the wisdom and knowledge of the well-paid wizards of investment, merely by choosing the existing collection of equities built by the experts.

Charts below for the NYSE International100 Index reveal low-yielding stocks whose prices increase (or whose dividends decrease) as candidates to be sold off once each year in order to sweep gains and reinvest the seed money into higher yielding stocks in the same index.

Two key metrics determine the yields that rank the NYSE International 100 dog stocks: (1) Stock price; (2) Annual dividend. Dividing the annual dividend by the price of the stock declares the percentage yield by which each dog stock is ranked. Thus the investor is able to follow, trade, and await the results from an investment in the lowest priced, highest-yielding five or 10 stocks in the index.

Instant investment wisdom from the NYSE International 100

Listed below are the top 30 NYSE International100 stocks by yield as of 12/30/11 per Yahoo Finance data. The NYSE states, "The NYSE International 100 Index tracks the largest 100 non-U.S. common stocks listed on the New York Stock Exchange. As of year-end 2004, the companies represented have a combined market capitalization (float-adjusted) of $4.3 trillion. Together they represent over one-quarter of the total market capitalization of all common stocks listed on the NYSE."

(Click charts to enlarge)

For December, five of the top 10 stocks paying the biggest dividends in this index were technology companies. Nokia (NYSE:NOK) last topped this list in July and edged out Telefonica SA (NYSE:TEF) by 0.13%. NOK became tops again with a 9.96% yield in December. Of these top 30 NYSE International dividend payers, seven technology companies, three consumer goods, seven financial, one services, eight basic materials, no industrial, two healthcare, two utilities, and no conglomerates represent the sectors.

2011's vertical moves by NYSE International 100 index dividend payers

In 2011 five different companies exchanged places at the top of the list, TEF, YPF, NOK, STD, and SID. Color code shows: (Yellow) companies listed in first position at least once between January and October 2011; (Cyan Blue) companies listed in 10th position at least once between January and October 2011; (Magenta) companies listed in 20th position at least once between January and October 2011; (Green) companies listed in 30th position at least once between January and October 2011. Duplicates are depicted in color for highest ranking attained.

While there were no changes in the NYSE International 100 stock top 30 list in October or November, there were two in December: AZN, & TRI replaced PUK, & SLF.

TOT made the most significant vertical move in December by virtue of a dividend estimated by Morningstar, Inc. to double from $1.37 per share annually to $2.75.

2011 dividend vs. price results for NYSE International Index top 10

Below is a graph of the relative strengths of the top 10 NYSE International 100 Index stocks by yield as of December 30, 2011. Using 12 months of historic projected annual dividend history from $1000 invested in the 10 highest-yielding stocks each month and the total single share prices of those 10 stocks creates the data points for each month shown in green for price and blue for dividends.

Our NYSE International 100 Index component update shows bear market divergence continuing with dividends from $1k invested in the top 10 moving up and away from level aggregate total single share prices.

Will Europe's economy turn bullish in 2012 and impact this index? Stay tuned.

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

Disclaimer: This article is for informational and educational purposes only and shall not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, recommendation or endorsement to buy or sell any security. Prices and returns on equities in this article are listed without consideration of fees, commissions, taxes, penalties, or interest payable due to purchasing, holding or selling same.

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