1/26/2013

Dogs Of The Dow Jones: The Cheapest Stocks From The Index As Of January 2012

When we talk about making money with dividend or even value stocks, we all think about safe yields and big profits. Nobody talks about losses but they are also part of a trading business.

When you read my blog for a longer period, you would get some ideas of stocks you have never heard before. That’s right; my database includes all 6,607 stocks and some of them are working in real small niches. Today I like to go back and show you the 10 hottest dogs of the world’s most mentioned index, the Dow Jones Index.

I cover the “Dogs of the Dow” strategy in my blog “long-term-investments.blogspot.com” on a regular basis. The philosophy is to buy 10 stocks of the Dow Jones with the highest dividend yield and lowest price to earnings ratio at the beginning of the year and to hold these stocks for a year. After this period, the investor should sell stocks that are no more Dogs of the Dow and buy therefore new Dogs of the Dow. Below is an updated sheet of the 10 best Dogs of the Dow. Such stocks have the lowest expected price to earnings ratio and highest dividend yield within the Dow Jones Index.

The 10 cheapest stocks of the Dow Jones have an average dividend yield of 3.48 percent as well as a forward P/E ratio of 12.40. The average P/B ratio amounts to 2.68 and P/S ratio is 2.18.

Here is the table with some fundamentals:
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General Electric (NYSE:GE) has a market capitalization of $233.74 billion. The company employs 301,000 people, generates revenue of $147.359 billion and has a net income of $14.902 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $17.406 billion. The EBITDA margin is 11.81 percent (the operating margin is 11.81 percent and the net profit margin 10.11 percent).

Financial Analysis: The total debt represents 60.43 percent of the company’s assets and the total debt in relation to the equity amounts to 336.67 percent. Due to the financial situation, a return on equity of 12.26 percent was realized. Twelve trailing months earnings per share reached a value of $1.39. Last fiscal year, the company paid $0.70 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 16.06, the P/S ratio is 1.57 and the P/B ratio is finally 1.88. The dividend yield amounts to 3.45 percent and the beta ratio has a value of 1.63.


”Long-Term
Long-Term Stock History Chart Of General Electric (GE)
”Long-Term
Long-Term Dividends History of General Electric (GE)
”Long-Term
Long-Term Dividend Yield History of General Electric (GE)

The Procter & Gamble (NYSE:PG) has a market capitalization of $200.28 billion. The company employs 126,000 people, generates revenue of $83.680 billion and has a net income of $9.317 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $16.496 billion. The EBITDA margin is 19.71 percent (the operating margin is 15.88 percent and the net profit margin 11.13 percent).

Financial Analysis: The total debt represents 22.52 percent of the company’s assets and the total debt in relation to the equity amounts to 46.94 percent. Due to the financial situation, a return on equity of 13.86 percent was realized. Twelve trailing months earnings per share reached a value of $3.90. Last fiscal year, the company paid $2.14 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 18.78, the P/S ratio is 2.30 and the P/B ratio is finally 3.11. The dividend yield amounts to 3.19 percent and the beta ratio has a value of 0.43.


”Long-Term
Long-Term Stock History Chart Of The Procter & Gamble (PG)
”Long-Term
Long-Term Dividends History of The Procter & Gamble (PG)
”Long-Term
Long-Term Dividend Yield History of The Procter & Gamble (PG)

Chevron Corporation (NYSE:CVX) has a market capitalization of $227.42 billion. The company employs 61,000 people, generates revenue of $253.706 billion and has a net income of $27.008 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $60.545 billion. The EBITDA margin is 23.86 percent (the operating margin is 18.78 percent and the net profit margin 10.65 percent).

Financial Analysis: The total debt represents 4.85 percent of the company’s assets and the total debt in relation to the equity amounts to 8.36 percent. Due to the financial situation, a return on equity of 23.75 percent was realized. Twelve trailing months earnings per share reached a value of $12.19. Last fiscal year, the company paid $3.09 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 9.53, the P/S ratio is 0.89 and the P/B ratio is finally 1.89. The dividend yield amounts to 3.12 percent and the beta ratio has a value of 0.78.


”Long-Term
Long-Term Stock History Chart Of Chevron Corporation (CVX)
”Long-Term
Long-Term Dividends History of Chevron Corporation (CVX)
”Long-Term
Long-Term Dividend Yield History of Chevron Corporation (CVX)


Here is the full table of the 10 Dogs of the Dow:

Dogs of the Dow (Click to enlarge)

Related Stock Ticker Symbols:
T, VZ, MRK, PFE, JNJ, CVX, GE, DD, JPM, PG

Selected Articles:

1 comment:

  1. Anonymous1/26/2013

    The attractive feature of the strategy remains its simplicity, and it has historically outperformed the DOW by 3% with an annual return of 14.3%. An underlying assumption of the strategy is that these stocks are temporarily undervalued in the market, so the investors hope to reap benefits once the companies rebound and are more realistically valued by the market.

    ReplyDelete

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