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Foreword
While most of this collection of Dow Industrials is too pricey and reveals only skinny dividends, three of the ten lowest priced Dogs of the Dow are ready to buy. September finds Verizon (VZ), Dow (DOW), and Intel (INTC), living up to the dogcatcher ideal of annual dividends from $1K invested exceeding single share price.
There are, however, six more in September showing prices within 60% or less of meeting the dogcatcher ideal of annual dividends from $1K invested exceeding the single share prices: Cisco Systems (CSCO), Coca-Cola Co (KO); Chevron (CVX); Merck (MRK); Johnson & Johnson (JNJ); International Business Machines (IBM).
With renewed downside market pressure of 71.31%, it would be possible for all ten to become elite fair-priced dogs with their annual yield (from $1K invested) meeting or exceeding their single share prices.
[See a summary of top ten fair-priced September Dow Dogs in Actionable Conclusion 21 near the mid-point of this article.]
Actionable Conclusions (1-10): Brokers Expect 17.25% To 43.62% Net Gains From Top-Ten Dow Dogs By September 2025
Three of ten top dividend-yielding Dow dogs (tinted gray in the chart below) were among the top ten price gainers for the coming year based on analyst 1-year target prices. So, this September, 2024 yield-based forecast for Dow dogs, as graded by Wall St. wizard estimates, was 30% accurate.
Estimated dividend-returns from $1000 invested in the ten highest-yielding stocks and their aggregate one-year analyst median target prices, as reported by YCharts, created the 2024-25 data points for the projections below. (Note: one-year target-prices estimated by lone analysts were not applied.) Ten probable profit-generating trades projected to September, 2025 were:
Source: YCharts.com
Intel Corp was projected to net $436.22, based on dividends, plus the median of target price estimates from 36 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 3% over the market as a whole.
Boeing (BA) was projected to net $323.17, based on dividends, plus median target price estimates from 25 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 58% greater than the market as a whole.
Amazon (AMZN) was projected to net $255.79, based on dividends, plus the median of target price estimates from 59 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 14% greater than the market as a whole.
Chevron was projected to net $249.94, based on dividends, plus the median of target price estimates from 22 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 9% more than the market as a whole.
Disney (DIS) was projected to net $243.78 based on the median of target prices estimated by 27 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 40% greater than the market as a whole.
Salesforce (CRM) was projected to net $240.00 based on the median of target price estimates from 44 analysts, plus dividends, less broker fees. The Beta number showed this estimate subject to risk/volatility 29% over the market as a whole.
Microsoft (MSFT) was projected to net $226.00, based on the median of target price estimates from 50 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 10% less than the market as a whole.
Merck & Co Inc was projected to net $218.87, based on the median of target price estimates from 26 analysts, plus the estimated annual dividend, less broker fees. The Beta number showed this estimate subject to risk/volatility 61% less than the market as a whole.
Dow was projected to net $192.02, based on dividends, plus the median of target price estimates from 20 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 23% over the market as a whole.
Verizon was projected to net $172.50, based on dividends, plus the median of target price estimates from 26 analysts, less broker fees. The Beta number showed this estimate subject to risk/volatility 58% less than the market as a whole.
The average net gain in dividend and price was estimated at 25.58% on $10k invested as $1k in each of these top ten Dow Index stocks. This gain estimate was subject to average risk/volatility 16% more than the market as a whole.
Source: Open source dog art from dividenddogcatcher.com
The Dividend Dogs Rule
Stocks earned the "dog" moniker by exhibiting three traits: (1) paying reliable, repeating dividends, (2) their prices fell to where (3) yield (dividend/price) grew higher than their peers. Thus, the highest yielding stocks in any collection became known as "dogs." More precisely, these are, in fact, best called, "underdogs".
The September, 2024 Dow 30 By Yield
Source: YCharts.com
Actionable Conclusions (11-20): 10 Top September Dow Dividend Stocks By Yield Ranged 2.57% To 6.53% Per YCharts
Top ten Dow Dogs occupied six of eleven Morningstar sectors.
A lone communication services dog placed first, Verizon [1], to lead the pack. Then, in second place was the lone basic materials dog, Dow Inc [2]. Another loner from the energy sector was third, Chevron [3].
Then, three technology sector dogs took the fourth, fifth and tenth positions: International Business Machines [4], followed by its compatriot techno firm, Cisco Systems [5], and Intel [10].
Three healthcare stocks placed sixth, seventh, and ninth, Johnson & Johnson [5], Amgen Inc (AMGN) [8], and Merck [9]. Sandwiched among the health trio, in eighth place, was the lone consumer staple stalwart, Coca-Cola Co [8], to complete the September Dogs of the Dow by yield.
Source: YCharts.com
Dividend Vs. Price Results
A graph above shows the relative strengths of the top ten August Dow dogs by dividend and price as of market close 9/4/2024.
This month, seven of the top-ten Dow dogs show a less than ideal status because the prices of those seven exceed the projected annual dividends from $1k invested in each.
A dividend dogcatcher priority is to select stocks whose dividends from $1K invested are greater than their single share price. As mentioned above, that condition was reached by just three of the five lowest priced Dogs of the Dow. Only Verizon, Dow, and Intel, lived up to the dogcatcher ideal of annual dividends from $1K invested exceeding single share prices.
However, six more, Cisco Systems, Coca-Cola Co, Chevron, Merck, Johnson & Johnson, and International Business Machines, showed prices within 57.3% of meeting that goal.
Actionable Conclusion (21): Five of Twenty-Eight Dow Dividend Dogs Show Negative Free Cash Flow Yields
Source: YCharts.com
A negative gap between dividend yield and free cash flow yield defines a negative free-cash-flow (NFCF) stock. That is, their dividend payout exceeds their cash on hand to pay dividends. The July failing five are Dow Inc, The Goldman Sachs Group, Intel, JPMorgan Chase, and UnitedHealth.
Two cut their dividends in the 2020 Ides of March depression times, Boeing , and The Walt Disney Co. One more snuck onto the Dow index without a dividend.
However, in March Salesforce declared its first-ever quarterly payout and Disney in January rejoined the dividend paying ranks. However, seven (five short on cash and two non-dividend payers - Amazon, and Boeing - cast a pall on the Dow by being stockholder repulsive.
Remember, this dogcatcher yield-based stock-picking strategy is contrarian. That means rooting for (buying) the underdog is productive when you don't already own those stocks. If you do hold those stocks, then you must look for opportune pull-backs in price to add to your position to best improve your dividend yield. Plenty of pull-back opportunities appear to be ahead. Dread the Fed.
Price Drops or Dividend Increases Could Get All Ten Dow Dogs Back to "Fair Price" Rates For Investors
Source: YCharts.com
The charts above retain the current dividend amount and adjust share price to produce a yield (from $1K invested) to equal or exceed the single share price of each stock. As the top illustration shows, three are already ideally priced. Besides Verizon, Dow, and Intel, already in the ideal zone, seven more low-priced stocks are within $235.77 of getting there.
The alternative, of course, could be that these companies raise their dividends. That may be too much to ask in these highly disrupted, inflationary, recessionary, yet cash-rich, and volatile times. Mr. Market is far more effective at moving prices up or down to appropriate amounts, just watch and buy when your targeted stock price moves to a sweet spot.
Source: YCharts.com
Actionable Conclusions: (22-31) Broker 1-Yr. Targets Showed 15.27% To 29.48% Top Ten Dow Index Upsides To September, 2025; (32) Four -0.27 to -4.61% Downsiders Emerged
To quantify top-dog rankings, analyst median price-target estimates provided a "market-sentiment" gauge of upside-potential. Added to the simple high-yield "dog" metrics, analyst median-price target-estimates provided another tool to dig-out bargains.
Analysts Forecast A 32.89% Advantage For 5 Highest-Yield, Lowest-Priced of 10 Dow Dogs As Of September 4, 2025
Ten-top Dow dogs were culled by yield for their monthly update. Yield (dividend / price) results as verified by YCharts did the ranking.
Source: YCharts.com
As noted-above, top-ten Dow dogs, selected 9/4/24 by yield, represented six of eleven sectors. (Real Estate is not reported by the Dow, and Utilities has its own Dow Index. Consumer Discretionary, Financials, and Industrials also missed the top-ten cut.)
Actionable Conclusions: Analysts Expected 5 Lowest-Priced of the Ten Highest-Yield Dow Dogs (34) To Deliver 18.15% Vs. (35) 13.66% Net Gains by All Ten Come September 4, 2025
Source: YCharts.com
$5000 invested as $1k in each of the five lowest-priced stocks in the top ten Dow Dividend kennel by-yield were predicted by analyst 1-year targets to deliver 32.89% more gain than from $5,000 invested in all-ten. The very lowest-priced top ten yielding stock, Intel, showed top analyst-estimated gains of 43.62%.
Source: YCharts.com
The five lowest-priced Dow top-yield dogs for September were: Intel; Verizon; Cisco; Dow; Cola-Cola, with prices ranging from $19.43 to $72.56.
Five higher-priced Dow top-yield dogs as of July 30 were: Merck; Chevron; Johnson & Johnson; International Business Machines; Amgen, whose prices ranged from $115.80 to $330.64.
The distinction between five low-priced dividend dogs and the general field of ten reflected Michael B. O'Higgins' "basic method" for beating the Dow. The scale of projected gains based on analyst targets added a unique element of "market sentiment" gauging upside potential. It provided a here-and-now equivalent of waiting a year to find out what might happen in the market.
Caution is advised, however, since analysts are historically only 15% to 85% accurate on the direction of change and just 0% to 15% accurate on the degree of change. (In 2017 the market somewhat followed analyst sentiment. In 2018 analysts estimates were contrarian indicators of market performance, and they continued to be contrary for the first two quarters of 2019 but switched to conforming for the last two quarters.) In 2020 analyst projections were quite contrarian.
In the first half of 2021 most dividend stock price actions exceeded all analyst expectations. The last half of 2021 was still gangbusters. The 2022 September-December slump freed-up five or more Dow dogs, sending them into the ideal zone where returns from $1k invested equal (or exceed) their single-share price. 2023 continued the slide. A Santa Claus rally staved off the eventual 2024 depression. 3M might have joined the "ideal" four or five, except for its decision to cut its dividend in half. The bubble is inflated, but two more dogs are priced right, even if their free cash flow is lagging.
As the dithering Fed-fueled slide gains momentum through 2024, with the exception of a few AI tech stocks, look for at least half of the ten Dow Dogs to become Fair-priced… slowly, but surely.
Afterword
Lest there be any doubt about the recommendations in this article, this month there are three Dow Index stocks showing dividends (from $1k invested) exceeding single share price: Verizon, Dow, and, Intel. On the downside, five cash flow laggards exist: Dow; Goldman; Intel; JPMorgan; UnitedHealth.
The net gain/loss estimates above did not factor in any foreign or domestic tax problems resulting from distributions. Consult your tax advisor regarding the source and consequences of "dividends" from any investment.
Stocks listed above were suggested only as possible reference points for your Dow dividend dog stock purchase or sale research process. These were not recommendations.
Disclaimer: This article is for informational and educational purposes only and should 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 except as noted are listed without consideration of fees, commissions, taxes, penalties, or interest payable due to purchasing, holding, or selling same.
Graphs and charts were compiled by Rydlun & Co., LLC from data derived from YCharts; finance.yahoo.com; analyst mean target price by YCharts. Open source dog art from dividenddogcatcher.com.
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