Banking on Large Cap Dividend Stocks: Five 'Dogs of the Dow' Worth Betting On

The “Dogs of the Dow” strategy zeroes in on the 10 Stocks in the Dow Jones Industrial Average (DIA) with the highest dividend yield. This stock-picking strategy depends for its success on the fact that out of a select list of 30 large-cap blue chip stocks, a portfolio of the 10 highest yielding components is likely to outperform the Index over the ensuing 12 months.Research from 1973 to 1991, when Michael O’Higgins first published the “Dogs of the Dow” strategy, showed that it significantly outperformed the DIA. Since 1996, the strategy has had mixed results, but performed quite well in 2010, with the 10 stocks showing a gain of 15.5% vs. a gain of 11% for the DIA. With dividends factored in, the overall return was 21% vs. 14% for the DIA.... Read more