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10 Top Dogs of the Dow Jones Index - September 2013 List

Dogs of the Dow Jones originally published on “long-term-investments.blogspot.com”. The Dogs of the Dow Jones Strategy is a popular investment rule or strategy which is used by many investors. The success is controversial. Some studies say that you can create an outperformance by following this rule; others say you don’t have a benefit from it.

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.

Today you can find a full List of the cheapest stocks from the Dow Jones, also named as Dogs of the Dow Jones in the attached list.

Summarized, the 10 cheapest stocks of the Dow Jones have an average dividend yield of 3.53 percent as well as a forward P/E ratio of 12.20. The average P/B ratio amounts to 2.67 and P/S ratio is 2.48.

Here are the Dogs with the highest expected earnings growth:
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General Electric (NYSE:GE) has a market capitalization of $246.96 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 9.8 percent for the upcoming five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.28, the P/S ratio is 1.67 and the P/B ratio is finally 2.05. The dividend yield amounts to 3.14 percent and the beta ratio has a value of 1.72.


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 $136.41 billion. The company employs 180,900 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 $37.466 billion. The EBITDA margin is 32.34 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 $2.02 in the form of dividends to shareholders. Earnings of VZ are expected to grow by 9.36 percent for the upcoming five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 88.13, the P/S ratio is 1.16 and the P/B ratio is finally 4.05. The dividend yield amounts to 4.52 percent and the beta ratio has a value of 0.38.


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)

Cisco Systems (NASDAQ:CSCO) has a market capitalization of $128.10 billion. The company employs 66,639 people, generates revenue of $48.607 billion and has a net income of $9.983 billion. Cisco Systems’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $13.652 billion. The EBITDA margin is 28.09 percent (the operating margin is 22.97 percent and the net profit margin 20.54 percent).

Financial Analysis: The total debt represents 16.02 percent of Cisco Systems’s assets and the total debt in relation to the equity amounts to 27.42 percent. Due to the financial situation, a return on equity of 18.08 percent was realized by Cisco Systems. Twelve trailing months earnings per share reached a value of $1.86. Last fiscal year, Cisco Systems paid $0.53 in the form of dividends to shareholders. Earnings of CSCO are expected to grow by 9.10 percent for the upcoming five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 12.78, the P/S ratio is 2.69 and the P/B ratio is finally 2.23. The dividend yield amounts to 2.78 percent and the beta ratio has a value of 1.26.


Long-Term Stock Price Chart Of Cisco Systems (CSCO)
Long-Term Dividend Payment History of Cisco Systems (CSCO)
Long-Term Dividend Yield History of Cisco Systems (CSCO)

Take a closer look at the full list of the 10 cheapest stocks of the Dow Jones. In average they have a dividend yield of 3.53 percent as well as a forward P/E ratio of 12.20. The average P/B ratio amounts to 2.67 and P/S ratio is 2.48.

Dogs of the Dow Jones List


Dogs of the Dow Jones List (Click to enlarge)


Related Stock Ticker Symbols:
T, VZ, INTC, MRK, PFE, GE, DD, JPM, CSCO, MSFT

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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