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Jan. 28, 2022, 8:35 a.m. EST

What’s old is new again — the Dogs of the Dow are outperforming the stock market

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By Steve Goldstein

The Dogs of the Dow strategy has been around awhile. It’s where investors pick the 10 stocks with the highest dividend yield in the Dow Jones Industrial Average at the end of the year, and invest equally in each one for the duration of the following year. Since they are high yielding, they are “dogs,” i.e. out of favor with investors. It was popularized in the 1991 book “Beating the Dow” by Michael O’Higgins.

It wasn’t the right strategy for 2021, when the Dogs generated a 16% return, underperforming the 21% rise for the broader Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.76% and the 29% rise for the S&P 500 index /zigman2/quotes/210599714/realtime SPX +2.47% .

But now the Dogs have some bite, at least in relative terms. The Dogs so far have returned 1%, outperforming their noncanine Dow counterparts that have dropped 6%, and the S&P 500, which has retreated by 9%. Then again, an investor can just go to cash and get similar returns without any risk.

Ticker Company Yield at end-21 YTD change
/zigman2/quotes/203121064/composite DOW Dow 4.94% 6.1%
/zigman2/quotes/204980236/composite VZ Verizon Communications 4.93% -1.5%
/zigman2/quotes/203856914/composite IBM International Business Machines 4.91% -0.8%
/zigman2/quotes/205871374/composite CVX Chevron 4.57% 15.5%
/zigman2/quotes/203410933/composite WBA Walgreens Boots Alliance 3.66% -3.5%
/zigman2/quotes/209956077/composite MRK Merck 3.60% 5.1%
/zigman2/quotes/209157011/composite AMGN Amgen 3.45% -0.4%
/zigman2/quotes/205029460/composite MMM 3M 3.33% -3.2%
/zigman2/quotes/209159848/composite KO Coca-Cola 2.84% 0.7%
/zigman2/quotes/203649727/composite INTC Intel 2.70% -6.4%
Source: Dogs of the Dow website

This year has marked the widest gap in returns between the Dogs and the broad Dow 30 through the first 18 trading days of the year since 2001, says Jake Gordon, an analyst at Bespoke Investment Group.

The buzz

Apple /zigman2/quotes/202934861/composite AAPL +4.08% rose 3% in premarket trade reported fiscal first-quarter earnings and sales well ahead of estimates, as its CEO Tim Cook told The Wall Street Journal that it expected revenue in the current quarter to grow. Read what analysts are saying about Apple.

Visa /zigman2/quotes/203660239/composite V +2.08% joined rival payment processors Mastercard /zigman2/quotes/207581792/composite MA +2.25% and American Express /zigman2/quotes/203805826/composite AXP +2.56% in topping earnings forecasts.

Robinhood Markets /zigman2/quotes/228268942/composite HOOD +11.85% slumped 14% in the premarket, after the online broker’s results disappointed investors. Heading into Friday, Robinhood shares have dropped 85% from their August peak.

One Dog of the Dow, Chevron, slipped as the oil major missed earnings estimates.

Employment costs in the fourth quarter rose 1%, though that was below estimates. Personal income also came in below estimates.

The market

U.S. stock futures zig-zagged ahead of the open, with the S&P 500 /zigman2/quotes/209948968/delayed ES00 +0.29% contract underperforming the Nasdaq-100 /zigman2/quotes/210219788/delayed NQ00 +0.31% contract.

The yield on the 10-year Treasury /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y 0.00% was 1.83%.

Top tickers

Here were the most active tickers on MarketWatch as of 6 a.m. Eastern.

Ticker Security name
/zigman2/quotes/203558040/composite TSLA Tesla
/zigman2/quotes/202934861/composite AAPL Apple
/zigman2/quotes/203755179/composite GME GameStop
/zigman2/quotes/200235402/composite AMC AMC Entertainment
/zigman2/quotes/204905836/composite NIO NIO
/zigman2/quotes/200467500/composite NVDA Nvidia
/zigman2/quotes/228268942/composite HOOD Robinhood Markets
/zigman2/quotes/207382046/composite XELA Exela Technologies
/zigman2/quotes/207732364/composite MSFT Microsoft
/zigman2/quotes/208144392/composite AMD Advanced Micro Devices

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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
33,212.96
+575.77 +1.76%
Volume: 331.19M
May 27, 2022 5:49p
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/zigman2/quotes/210599714/realtime
US : S&P US
4,158.24
+100.40 +2.47%
Volume: 2.17B
May 27, 2022 5:49p
loading...
/zigman2/quotes/203121064/composite
US : U.S.: NYSE
$ 69.06
+1.92 +2.86%
Volume: 4.78M
May 27, 2022 4:00p
P/E Ratio
7.52
Dividend Yield
4.05%
Market Cap
$50.28 billion
Rev. per Employee
$1.63M
loading...
/zigman2/quotes/204980236/composite
US : U.S.: NYSE
$ 51.40
+0.41 +0.80%
Volume: 13.35M
May 27, 2022 4:00p
P/E Ratio
10.00
Dividend Yield
4.98%
Market Cap
$215.86 billion
Rev. per Employee
$1.13M
loading...
/zigman2/quotes/203856914/composite
US : U.S.: NYSE
$ 139.27
+2.38 +1.74%
Volume: 4.61M
May 27, 2022 4:00p
P/E Ratio
22.86
Dividend Yield
4.74%
Market Cap
$125.26 billion
Rev. per Employee
$218,641
loading...
/zigman2/quotes/205871374/composite
US : U.S.: NYSE
$ 178.28
+1.69 +0.96%
Volume: 10.51M
May 27, 2022 4:04p
P/E Ratio
16.77
Dividend Yield
3.19%
Market Cap
$350.29 billion
Rev. per Employee
$4.18M
loading...
/zigman2/quotes/203410933/composite
US : U.S.: Nasdaq
$ 43.71
+0.67 +1.56%
Volume: 4.93M
May 27, 2022 4:00p
P/E Ratio
6.03
Dividend Yield
4.37%
Market Cap
$37.76 billion
Rev. per Employee
$431,584
loading...
/zigman2/quotes/209956077/composite
US : U.S.: NYSE
$ 93.08
+0.77 +0.83%
Volume: 9.80M
May 27, 2022 4:03p
P/E Ratio
16.65
Dividend Yield
2.97%
Market Cap
$235.38 billion
Rev. per Employee
$799,500
loading...
/zigman2/quotes/209157011/composite
US : U.S.: Nasdaq
$ 255.26
+2.21 +0.87%
Volume: 2.68M
May 27, 2022 4:00p
P/E Ratio
25.15
Dividend Yield
3.04%
Market Cap
$136.36 billion
Rev. per Employee
$1.09M
loading...
/zigman2/quotes/205029460/composite
US : U.S.: NYSE
$ 149.51
+2.47 +1.68%
Volume: 1.78M
May 27, 2022 4:04p
P/E Ratio
15.57
Dividend Yield
3.99%
Market Cap
$85.08 billion
Rev. per Employee
$371,926
loading...
/zigman2/quotes/209159848/composite
US : U.S.: NYSE
$ 64.68
+0.38 +0.59%
Volume: 17.71M
May 27, 2022 4:00p
P/E Ratio
27.28
Dividend Yield
2.72%
Market Cap
$280.39 billion
Rev. per Employee
$508,608
loading...
/zigman2/quotes/203649727/composite
US : U.S.: Nasdaq
$ 44.55
+1.07 +2.46%
Volume: 30.55M
May 27, 2022 4:00p
P/E Ratio
7.41
Dividend Yield
3.28%
Market Cap
$182.16 billion
Rev. per Employee
$641,652
loading...
/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 149.64
+5.86 +4.08%
Volume: 90.98M
May 27, 2022 4:00p
P/E Ratio
24.32
Dividend Yield
0.61%
Market Cap
$2421.95 billion
Rev. per Employee
$2.51M
loading...
/zigman2/quotes/203660239/composite
US : U.S.: NYSE
$ 212.88
+4.33 +2.08%
Volume: 4.90M
May 27, 2022 4:00p
P/E Ratio
34.23
Dividend Yield
0.70%
Market Cap
$443.25 billion
Rev. per Employee
$1.25M
loading...
/zigman2/quotes/207581792/composite
US : U.S.: NYSE
$ 357.78
+7.89 +2.25%
Volume: 2.66M
May 27, 2022 4:00p
P/E Ratio
37.22
Dividend Yield
0.55%
Market Cap
$348.09 billion
Rev. per Employee
$828,667
loading...
/zigman2/quotes/203805826/composite
US : U.S.: NYSE
$ 169.60
+4.23 +2.56%
Volume: 2.16M
May 27, 2022 4:03p
P/E Ratio
16.99
Dividend Yield
1.23%
Market Cap
$127.72 billion
Rev. per Employee
$723,328
loading...
/zigman2/quotes/228268942/composite
US : U.S.: Nasdaq
$ 10.38
+1.10 +11.85%
Volume: 17.02M
May 27, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$9.05 billion
Rev. per Employee
$425,102
loading...
/zigman2/quotes/209948968/delayed
US : U.S.: CME
$ 4,168.00
+12.25 +0.29%
Volume: 1.48M
May 27, 2022 3:59p
loading...
/zigman2/quotes/210219788/delayed
US : U.S.: CME
$ 12,717.50
+39.75 +0.31%
Volume: 601,231
May 27, 2022 3:59p
loading...
/zigman2/quotes/211347051/realtime
add Add to watchlist BX:TMUBMUSD10Y
BX : Tullett Prebon
2.75
0.00 0.00%
Volume: 0.00
May 27, 2022 2:04p
loading...
/zigman2/quotes/203558040/composite
US : U.S.: Nasdaq
$ 759.63
+51.90 +7.33%
Volume: 29.76M
May 27, 2022 4:00p
P/E Ratio
103.07
Dividend Yield
N/A
Market Cap
$786.98 billion
Rev. per Employee
$626,347
loading...
/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 149.64
+5.86 +4.08%
Volume: 90.98M
May 27, 2022 4:00p
P/E Ratio
24.32
Dividend Yield
0.61%
Market Cap
$2421.95 billion
Rev. per Employee
$2.51M
loading...
/zigman2/quotes/203755179/composite
US : U.S.: NYSE
$ 137.21
+8.75 +6.81%
Volume: 7.51M
May 27, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$10.47 billion
Rev. per Employee
$500,892
loading...
/zigman2/quotes/200235402/composite
US : U.S.: NYSE
$ 14.43
+2.20 +17.99%
Volume: 89.91M
May 27, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$7.46 billion
Rev. per Employee
$101,458
loading...
/zigman2/quotes/204905836/composite
US : U.S.: NYSE
$ 16.57
+0.54 +3.37%
Volume: 51.41M
May 27, 2022 4:04p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$26.80 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/200467500/composite
US : U.S.: Nasdaq
$ 188.11
+9.60 +5.38%
Volume: 73.84M
May 27, 2022 4:00p
P/E Ratio
50.48
Dividend Yield
0.09%
Market Cap
$471.03 billion
Rev. per Employee
$1.31M
loading...
/zigman2/quotes/228268942/composite
US : U.S.: Nasdaq
$ 10.38
+1.10 +11.85%
Volume: 17.02M
May 27, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$9.05 billion
Rev. per Employee
$425,102
loading...
/zigman2/quotes/207382046/composite
US : U.S.: Nasdaq
$ 0.22
+0.0051 +2.37%
Volume: 23.32M
May 27, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$97.23 million
Rev. per Employee
$67,409
loading...
/zigman2/quotes/207732364/composite
US : U.S.: Nasdaq
$ 273.24
+7.34 +2.76%
Volume: 26.91M
May 27, 2022 4:00p
P/E Ratio
28.51
Dividend Yield
0.91%
Market Cap
$2043.57 billion
Rev. per Employee
$1.06M
loading...
/zigman2/quotes/208144392/composite
US : U.S.: Nasdaq
$ 102.26
+3.51 +3.55%
Volume: 104.35M
May 27, 2022 4:00p
P/E Ratio
38.14
Dividend Yield
N/A
Market Cap
$165.71 billion
Rev. per Employee
$1.22M
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