Dogs of the Dow
Jones originally published on “long-term-investments.blogspot.com”. As you might know, I also cover some popular indices and investing strategies
and present great picks from the selection.
One investment
strategy that I cover and 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 over the time.
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 3.56
percent as well as a forward P/E ratio of 24.62. The average P/B ratio amounts
to 2.65 and P/S ratio is 2.46.
Intel (NASDAQ:INTC) has a market capitalization of $110.97 billion. The company employs 106,000 people, generates revenue of $53,341.00 million and has a net income of $11,005.00 million. Intel’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $22,160.00 million. 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. The 5-Year earnings are expected to grow by 11 percent.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 12.04, the P/S ratio is 2.08 and the P/B ratio is finally 2.15. The dividend yield amounts to 4.04 percent and the beta ratio has a value of 1.02.
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| Long-Term Stock Price Chart Of Intel (INTC) |
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| Long-Term Dividend Payment History of Intel (INTC) |
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| Long-Term Dividend Yield History of Intel (INTC) |
Verizon Communications (NYSE:VZ) has a market capitalization of $134.33 billion. The company employs 180,900 people, generates revenue of $115,846.00 million and has a net income of $10,557.00 million. Verizon Communications’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $37,190.00 million. 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. The 5-Year earnings are expected to grow by 10.46 percent.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 86.78, the P/S ratio is 1.16 and the P/B ratio is finally 4.05. The dividend yield amounts to 4.39 percent and the beta ratio has a value of 0.42.
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| Long-Term Stock Price Chart Of Verizon Communications (VZ) |
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| Long-Term Dividend Payment History of Verizon Communications (VZ) |
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| Long-Term Dividend Yield History of Verizon Communications (VZ) |
General Electric (NYSE:GE) has a market capitalization of $240.44 billion. The company employs 305,000 people, generates revenue of $147,359.00 million and has a net income of $14,902.00 million. General Electric’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $29,339.00 million. 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. The 5-Year earnings are expected to grow by 9.80 percent.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 16.82, the P/S ratio is 1.63 and the P/B ratio is finally 2.00. The dividend yield amounts to 3.22 percent and the beta ratio has a value of 1.68.
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| Long-Term Stock Price Chart Of General Electric (GE) |
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| Long-Term Dividend Payment History of General Electric (GE) |
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| Long-Term Dividend Yield History of General Electric (GE) |
Cisco Systems (NASDAQ:CSCO) has a market capitalization of $127.06 billion. The company employs 66,639 people, generates revenue of $48,607.00 million and has a net income of $9,983.00 million. Cisco Systems’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $13,652.00 million. The EBITDA margin is 28.09 percent (the operating margin is 23.03 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 $0.62 in the form of dividends to shareholders. The 5-Year earnings are expected to grow by 9.10 percent.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 12.81, the P/S ratio is 2.62 and the P/B ratio is finally 2.15. The dividend yield amounts to 2.85 percent and the beta ratio has a value of 1.22.
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| Long-Term Stock Price Chart Of Cisco Systems (CSCO) |
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| Long-Term Dividend Payment History of Cisco Systems (CSCO) |
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| Long-Term Dividend Yield History of Cisco Systems (CSCO) |
Take a closer look at the full list of the Dogs of the Dow Jones Index. The
10 cheapest stocks of the Dow Jones have an average dividend yield of 3.56
percent as well as a forward P/E ratio of 24.62. The average P/B ratio amounts
to 2.65 and P/S ratio is 2.46.
Here are the current Dogs of the Dow Jones
Related Stock Ticker Symbols:
Here are the current Dogs of the Dow Jones
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| Dogs of the Dow Jones (Click to enlarge) |
Related Stock Ticker Symbols:
T, INTC, VZ, MRK, DD, GE, CSCO,
MSFT, JPM, PFE
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.