You can easily get at everything right here from this homepage, the site links located at the bottom of each page and the search box located near the top right corner of each page (above the footer on mobile). Enjoy and don’t forget to sign up for our free Dogs of the Dow Newsletter. There are over 100 stock/market charts (e.g. intraday, trend and seasonality) that can be accessed directly from the footer of any page.
However, they shouldn’t weigh down the rest of the group too much. Investors who managed to profit in 2022 during a dismal year for most stocks will probably review capital in the twenty-first century want to stick with their same approach this year. Accessing all of the investment information here at Dogs of the Dow is quick, easy and free.
And with just three simple steps, executed just once per year, we can create our own Dow Dogs ETF (minus the annual fees). The success of the Dogs of the Dow has a lot of investors taking a closer look at the strategy to see if it can keep outperforming in the coming year. Without further ado, here are the 10 stocks that will comprise the Dogs of the Dow for 2023, along with an explanation of the strategy behind them. While the Dogs of the Dow strategy should be relatively low maintenance, it’s not entirely hands-off. Investors should keep an eye on their portfolio throughout the year, monitoring the performance of each Dog. This periodic check ensures the portfolio remains aligned with the strategy’s principles.
How the Dogs of the Dow Strategy Works
At the beginning of the year, you just have to take a look at the 10 Dow stocks that finished the previous year with the highest dividend yields. Remember that these were chosen on the first trading day of 2023. This means they are “the official dogs of the Dow.” However, changes in the market mean that the live list of top Dogs changes frequently.
Intel’s turnaround is still in the early stages, and the market hates the company, but the high demand for chips should be a tailwind. With the highest yield in a decade combined with a reasonable payout ratio of 51%, INTC stock is a solid choice. The start of the year is a good time to add to your existing portfolio or start new positions.
- Investors following this strategy typically seek a reliable income stream, so you would assess whether the chosen stocks delivered on this front.
- Comparing its performance to the broader market helps assess its sensitivity to economic cycles and provides a stable track record that appeals to risk-averse investors.
- Recently reported third-quarter earnings were mixed, neither confirming recovery nor presaging disaster.
- This selection is based solely on dividend yield, aiming to identify high-yielding blue-chip stocks.
The Dogs strategy showed cracks in 2019, really fell off the rails in 2020 and came up short again in 2021. Get stock recommendations, portfolio guidance, and more fxcm broker review from The Motley Fool’s premium services. The Dogs of the Dow strategy produced a price change of -1.8%, beating the Dow’s performance by about 7 percentage points.
So, it behooves the average individual investor to understand what they are doing with their money. Then, on the first trading day of the new year, invest an equal dollar amount in each of them. Hold the portfolio for a year, then repeat the process at the beginning of each subsequent year. The results in 2019 and 2020 were not favorable, with the Dogs of the Dow portfolio generating 18.7% and (7.9%) in total returns (losses) respectively, while the Dow returned 25.3% and 9.7% in those years. In 2021, Dogs of the Dow once again outperformed, with 25.3% in total returns, compared to 21% for the index. In 2018, the Dow generated 21% in total returns, while the Dogs of the Dow portfolio would have generated 27% in total returns.
Dogs Of The Dow Top The S&P 500
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Meanwhile, the “dogs” are yielding about 1.9% percentage points above the Dow index, while the “small dogs” carry an average yield that is 2.5% percentage points higher than the Dow. Indeed, our proprietary model suggests that the Dow as a whole is overvalued in the 30,000s, and would be more appropriately priced in the low to mid 20,000s. This opinion is actually quite widely shared on Wall Street, where a number of houses have predicted “flat” stock returns for the rest of the 2020s. But “overvaluation” is true only for a majority of stocks in the Dow, not all of them.
ETFs and Mutual Funds that Track the Dogs of the Dow
Simultaneously, you would closely monitor the price trends of these stocks throughout the year. It is crucial to examine whether they experienced significant price appreciation, indicating strong capital gains, or remained relatively stable. Amgen is yielding 3.2%, and the dividend is growing at a double-digit rate.
In addition, it’s invested in the technology to deploy production units, known as “crackers,” so that it can quickly adjust to upstream changes with suppliers and downstream requirements from customers. Net-net, Dow is well-positioned to manage rising costs and feedstock bottlenecks, which may materialize in abundance in the coming year. First, the company puts a bit of effort into touting “feedstock flexibility,” which are the inputs to make chemicals, as a competitive advantage, and it’s more than management speak. Dow has strategically located its facilities close to low-cost sources. There is a path to growth, but Intel will need to thread the needle. The company has been losing market share to competitors after falling behind Advanced Micro Devices (AMD) in chip innovation and to Taiwan Semiconductor Manufacturing (TSM) in fabrication.
By monitoring the live list and identifying a stock entering the Dogs list due to a recent price decline, you might choose to invest in Dow stocks mid-year to capture potential dividend income. Suppose one of your Dogs significantly outperforms the others, and its dividend yield drops below that of other DJIA components. In that case, you can replace it with a higher-yielding stock from the live list. Investors can choose between these ETFs and mutual funds to gain exposure to dividend-yielding stocks that align with the Dogs of the Dow strategy. It’s essential to research each option thoroughly, considering factors such as fees, historical performance and specific stock holdings, to determine which best suits your investment goals and risk tolerance. These investment vehicles provide a convenient way to implement the Dogs of the Dow strategy while benefiting from professional portfolio management and diversification.
Will 2023 be another great year for the Dogs of the Dow?
Comparing its performance to the broader market helps assess its sensitivity to economic cycles and provides a stable track record that appeals to risk-averse investors. The following table tracks the year-to-date performance of the high dividend paying stocks that make up the 2023 Dogs of the Dow plus the rest of the Dow 30 stock market index. In addition to stock price and YTD percent change, the current dividend yield is included for each Dow stock. Summary data (e.g. YTD percent change and dividend yield) for the Dogs of the Dow, Small Dogs of the Dow, Dow 30, and Dow Jones Industrial Average are included below. Don’t miss out on important revisions to the official Dogs of the Dow.
Whether this strategy will work or not, though, will take time to determine. I don’t think I’m barking up the wrong tree at all with this alternative investing strategy. It just might make you more money in 2023 than the Dogs of the Dow will. However, if oil prices drop and interest rates keep going up, it will probably be because of a recession pepperstone review and sustained high inflation. My hunch is this environment could negatively impact the stocks in the Dogs of the Dow even more than it would those in the Dogs of the S&P. Because this is intended to be a low-maintenance, long-term strategy that mimics the performance of the DJIA, it shouldn’t be surprising that the long-term results are similar.
Also, summary data for the Dogs of the Dow, Dow Jones Industrial Average, and variations are included below. If you’re looking for the Dogs Of The Dow for 2023, there’s a strong crop to pick from. Due to falling stock prices, the 10 highest yielding stocks in the Dow now sport an average yield of 4.4%, up slightly from the Dogs’ 4% yield going into 2022. By contrast, both stocks new to the Dogs fared poorly in 2022. Similarly, JPMorgan Chase (JPM 1.50%) shares suffered when a combination of rising interest rates and the tough market environment for investment banking dealt the financial giant a double whammy. That’s all it takes, and there’s nothing more to do until the end of the year.
On the date of publication, Prakash Kolli held LONG positions in VZ, IBM and AMGN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. The author is not a licensed or registered investment adviser or broker/dealer. He is not providing you with individual investment advice. Please consult with a licensed investment professional before you invest your money. The company has dealt with challenges to its product portfolio by acquiring the oral immunology drug Otzela to complement Enebrel.
Value is an important metric to consider when evaluating stocks. Get this delivered to your inbox, and more info about our products and services. The gray cloud hanging over Intel is writ large in the initial public offering (IPO) of its Mobileye Global (MBLY) unit which it acquired for $15.3 billion in 2017. Transformations of the kind Walgreens is undertaking take time, and in healthcare, they take a lot of time. Getting paid more than 5% to wait might seem prudent, given the macros driving healthcare.