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Dogs of the Dow Jones Index As Of July 2013

Dogs of the Dow Jones originally published on “long-term-investments.blogspot.com”. I love it to make profits with stocks but I also need to accept that I will lose some money in the stock market if I’m too greedy and take big risks. There are hundreds and thousands of assets strategies out there and every tactic to gain money from the stock market could work and give you a passive income if you are disciplined.

One investment strategy I would like to update today is the Dogs of the Dow Jones investing rule. The popular investment theory was introduced by Michael O’Higgins in 1991 and became very popular.

The philosophy behind is to buy ten 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 ten best Dogs of the Dow. They have the lowest expected price to earnings ratio and highest dividend yield within the Dow Jones index.

Summarized, the 10 cheapest stocks of the Dow Jones have an average dividend yield of 3.43 percent as well as a forward P/E ratio of 12.44. The average P/B ratio amounts to 2.73 and P/S ratio is 2.53.

Here are the three best earnings grower:
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Intel (NASDAQ:INTC) has a market capitalization of $115.74 billion. The company employs 105,400 people, generates revenue of $53.341 billion and has a net income of $11.005 billion. Intel’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $22.160 billion. The EBITDA margin is 41.54 percent (the operating margin is 27.44 percent and the net profit margin 20.63 percent).


Financial Analysis: The total debt represents 15.94 percent of Intel’s assets and the total debt in relation to the equity amounts to 26.26 percent. Due to the financial situation, a return on equity of 22.66 percent was realized by Intel. Twelve trailing months earnings per share reached a value of $1.85. Last fiscal year, Intel paid $0.87 in the form of dividends to shareholders. Earnings of INTC are expected to grow by 11.0 percent yearly over the next five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 12.57, the P/S ratio is 2.15 and the P/B ratio is finally 2.23. The dividend yield amounts to 3.90 percent and the beta ratio has a value of 1.01.

Long-Term Stock Price Chart Of Intel (INTC)
Long-Term Dividend Payment History of Intel (INTC)
Long-Term Dividend Yield History of Intel (INTC)

General Electric (NYSE:GE) has a market capitalization of $254.88 billion. The company employs 305,000 people, generates revenue of $147.359 billion and has a net income of $14.902 billion. General Electric’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $29.339 billion. The EBITDA margin is 19.91 percent (the operating margin is 11.81 percent and the net profit margin 10.11 percent).

Financial Analysis: The total debt represents 60.42 percent of General Electric’s assets and the total debt in relation to the equity amounts to 336.56 percent. Due to the financial situation, a return on equity of 12.24 percent was realized by General Electric. Twelve trailing months earnings per share reached a value of $1.40. Last fiscal year, General Electric paid $0.70 in the form of dividends to shareholders. Earnings of GE are expected to grow by 10.96 percent yearly over the next five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.59, the P/S ratio is 1.73 and the P/B ratio is finally 2.09. The dividend yield amounts to 3.08 percent and the beta ratio has a value of 1.69.

Long-Term Stock Price Chart Of General Electric (GE)
Long-Term Dividend Payment History of General Electric (GE)
Long-Term Dividend Yield History of General Electric (GE)

Verizon Communications (NYSE:VZ) has a market capitalization of $146.02 billion. The company employs 181,900 people, generates revenue of $115.846 billion and has a net income of $10.557 billion. Verizon Communications’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $37.190 billion. The EBITDA margin is 32.10 percent (the operating margin is 11.36 percent and the net profit margin 9.11 percent).

Financial Analysis: The total debt represents 23.08 percent of Verizon Communications’s assets and the total debt in relation to the equity amounts to 156.79 percent. Due to the financial situation, a return on equity of 2.53 percent was realized by Verizon Communications. Twelve trailing months earnings per share reached a value of $0.54. Last fiscal year, Verizon Communications paid $2.03 in the form of dividends to shareholders. Earnings of VZ are expected to grow by 10.48 percent yearly over the next five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 94.32, the P/S ratio is 1.25 and the P/B ratio is finally 4.37. The dividend yield amounts to 4.06 percent and the beta ratio has a value of 0.42.

Long-Term Stock Price Chart Of Verizon Communications (VZ)
Long-Term Dividend Payment History of Verizon Communications (VZ)
Long-Term Dividend Yield History of Verizon Communications (VZ)

Take a closer look at the full list of the cheapest stocks from the Dow Jones Index - Dogs of the Dow. The average dividend yield of 3.43 percent as well as a forward P/E ratio of 12.44. The average P/B ratio amounts to 2.73 and P/S ratio is 2.53.

Here are the Dogs of the Dow Jones:

Cheapest Stocks From The Dow Jones -
Dogs of the Dow (Click to enlarge)

Selected Articles:

*I am long INTC, GE, CSCO. I receive no compensation to write about these specific stocks, sector or theme. I don't plan to increase or decrease positions or obligations within the next 72 hours.

For the other stocks: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.



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