The "Dogs of the Dow" is a strategy that consists
of buying the ten stocks with the highest dividend yield
among the thirty blue-chip companies that comprise the
Dow Jones Industrial Average. Dividend yield is calculated
as the annual dividends paid by a company divided by the
price of a share of stock. If the amount of the dividend
that a company pays stays the same, then as the price
of the stock goes down, the yield goes up. Stocks with
a relatively high dividend yield are often considered
to be out of favor in the marketplace - thus the term
"Dog".
The "Dogs of the Dow" strategy calls
for the investing of equal dollar amounts in the ten highest dividend
yielding Dow Jones stocks, and holding them for one year. Then,
after one year, the stocks are readjusted to maintain the top
ten highest dividend yielding Dow Jones stocks.
Hennessy Funds believes that one of the greatest
benefits of the "Dogs of the Dow" philosophy is that
it identifies potential values by investing in established companies
whose prices look to be undervalued.
|
As of 12/31/11 |
|
Dogs
of the Dow |
Dividend
Yield |
Per
Share Price |
| AT&T (T) |
5.8% |
$30.24 |
|
Verizon
Communications Inc. (VZ) |
5.0% |
$40.12 |
| Merck
& Co., Inc (MRK |
4.5% |
$37.70 |
| General Electric (GE) |
3.8% |
$17.91 |
| Pfizer
Inc. (PFE) |
3.7% |
$21.64 |
|
Dupont (E.I). De
Nemours (DD) |
3.6% |
$45.78 |
Johnson & Johnson (JNJ)
|
3.5% |
$65.58 |
Intel (INTC)
|
3.5% |
|
|
Procter & Gamble (PG)
|
3.2% |
$66.71 |
|
Kraft Foods, Inc. (KFT)
|
3.1% |
$37.36 |
|
