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.
Compared to the
latest screen from last month, Intel, Microsoft and McDonalds are back in the battle
and kicked off JP Morgan Chase, Chevron and Procter&Gamble.
The 10 cheapest
stocks of the Dow Jones have an average dividend yield of 3.71 percent as well
as a forward P/E ratio of 11.85. The average P/B ratio amounts to 3.36 and P/S
ratio is 2.41.
Here is the table with some fundamentals:
Intel Corporation (NASDAQ:INTC) has a market capitalization of $100.06 billion. The company employs 104,700 people, generates revenue of $53.341 billion and has a net income of $11.005 billion. The firm’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 the company’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. Twelve trailing months earnings per share reached a value of $2.13. Last fiscal year, the company paid $0.90 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 9.50, the P/S ratio is 1.88 and the P/B ratio is finally 1.95. The dividend yield amounts to 4.45 percent and the beta ratio has a value of 1.02.
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| Long-Term Stock History Chart Of Intel Corporation (INTC) |
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| Long-Term Dividends History of Intel Corporation (INTC) |
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| Long-Term Dividend Yield History of Intel Corporation (INTC) |
Johnson & Johnson (NYSE:JNJ) has a market capitalization of $209.42 billion. The company employs 117,900 people, generates revenue of $67.224 billion and has a net income of $10.514 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $14.243 billion. The EBITDA margin is 21.19 percent (the operating margin is 20.49 percent and the net profit margin 15.64 percent).
Twelve trailing months earnings per share reached a value of $3.87. Last fiscal year, the company paid $2.40 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 19.52, the P/S ratio is 3.14 and the P/B ratio is finally 3.27. The dividend yield amounts to 3.23 percent and the beta ratio has a value of 0.54.
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| Long-Term Stock History Chart Of Johnson & Johnson (JNJ) |
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| Long-Term Dividends History of Johnson & Johnson (JNJ) |
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| Long-Term Dividend Yield History of Johnson & Johnson (JNJ) |
McDonald's (NYSE:MCD) has a market capitalization of $96.52 billion. The company employs 420,000 people, generates revenue of $27.567 billion and has a net income of $5.464 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $8.461 billion. The EBITDA margin is 30.69 percent (the operating margin is 31.21 percent and the net profit margin 19.82 percent).
Twelve trailing months earnings per share reached a value of $5.36. Last fiscal year, the company paid $2.87 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.94, the P/S ratio is 3.50 and the P/B ratio is finally 6.95. The dividend yield amounts to 3.20 percent and the beta ratio has a value of 0.39.
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| Long-Term Stock History Chart Of McDonald's Corpor... (MCD) |
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| Long-Term Dividends History of McDonald's Corpor... (MCD) |
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| Long-Term Dividend Yield History of McDonald's Corpor... (MCD) |
Take a closer look at the 10 cheapest stocks of the Dow Jones. In average, they have a dividend yield of 3.71 percent as well as a forward P/E ratio of 11.85. The P/B ratio amounts to 3.36 and P/S ratio is 2.41.
Here is the full table:
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| Dogs of the Dow Jones (Click to enlarge) |
Related Stock Ticker Symbols:
T, VZ, INTC, MRK, DD, PFE, MSFT, GE, JNJ, MCD
Selected Articles:
*I am long INTC, JNJ and MCD.
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.