Bulletin
Investor Alert

Need to Know Archives | Email alerts

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

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

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Dow Jones Industrial Average (DJIA)
  • X
    S&P 500 Index (SPX)
  • X
    Dow Inc. (DOW)

or Cancel Already have a watchlist? Log In

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 +0.13% and the 29% rise for the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.11% .

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 +0.22% 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 +0.23% joined rival payment processors Mastercard /zigman2/quotes/207581792/composite MA +0.44% and American Express /zigman2/quotes/203805826/composite AXP +0.34% in topping earnings forecasts.

Robinhood Markets /zigman2/quotes/228268942/composite HOOD -0.95% 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 +0.15% contract underperforming the Nasdaq-100 /zigman2/quotes/210219788/delayed NQ00 +0.05% 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

Random reads

Watch CNBC’s Jim Cramer douse an ARK with some Sark to make an exchange-traded fund metaphor.

Proving all publicity is good publicity, Barnard Castle set a record for visitors after a controversial lockdown trip there by a former aide to U.K. Prime Minister Boris Johnson.

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

Want more for the day ahead? Sign up for The Barron’s Daily, a morning briefing for investors, including exclusive commentary from Barron’s and MarketWatch writers

/zigman2/quotes/210598065/realtime
US : Dow Jones Global
33,876.78
+43.17 +0.13%
Volume: 0.00
June 9, 2023 5:38p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
4,298.86
+4.93 +0.11%
Volume: 0.00
June 9, 2023 5:38p
loading...
/zigman2/quotes/203121064/composite
US : U.S.: NYSE
$ 51.74
-1.04 -1.97%
Volume: 5.48M
June 9, 2023 4:00p
P/E Ratio
12.93
Dividend Yield
5.41%
Market Cap
$36.60 billion
Rev. per Employee
$1.42M
loading...
/zigman2/quotes/204980236/composite
US : U.S.: NYSE
$ 35.47
+0.04 +0.11%
Volume: 14.96M
June 9, 2023 4:00p
P/E Ratio
6.91
Dividend Yield
7.36%
Market Cap
$149.12 billion
Rev. per Employee
$1.16M
loading...
/zigman2/quotes/203856914/composite
US : U.S.: NYSE
$ 135.30
+0.89 +0.66%
Volume: 3.98M
June 9, 2023 4:00p
P/E Ratio
68.92
Dividend Yield
4.91%
Market Cap
$122.86 billion
Rev. per Employee
$194,616
loading...
/zigman2/quotes/205871374/composite
US : U.S.: NYSE
$ 158.86
-0.38 -0.24%
Volume: 6.67M
June 9, 2023 4:03p
P/E Ratio
8.59
Dividend Yield
3.80%
Market Cap
$300.98 billion
Rev. per Employee
$5.29M
loading...
/zigman2/quotes/203410933/composite
US : U.S.: Nasdaq
$ 31.42
-0.43 -1.35%
Volume: 6.23M
June 9, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
6.11%
Market Cap
$27.11 billion
Rev. per Employee
$410,123
loading...
/zigman2/quotes/209956077/composite
US : U.S.: NYSE
$ 110.71
+0.39 +0.35%
Volume: 6.52M
June 9, 2023 4:03p
P/E Ratio
21.62
Dividend Yield
2.64%
Market Cap
$280.92 billion
Rev. per Employee
$827,391
loading...
/zigman2/quotes/209157011/composite
US : U.S.: Nasdaq
$ 218.76
-2.00 -0.91%
Volume: 1.71M
June 9, 2023 4:00p
P/E Ratio
14.87
Dividend Yield
3.89%
Market Cap
$116.89 billion
Rev. per Employee
$1.03M
loading...
/zigman2/quotes/205029460/composite
US : U.S.: NYSE
$ 99.90
-0.86 -0.85%
Volume: 4.51M
June 9, 2023 4:03p
P/E Ratio
10.35
Dividend Yield
6.01%
Market Cap
$55.11 billion
Rev. per Employee
$363,380
loading...
/zigman2/quotes/209159848/composite
US : U.S.: NYSE
$ 60.47
+0.10 +0.17%
Volume: 12.58M
June 9, 2023 4:00p
P/E Ratio
26.64
Dividend Yield
3.04%
Market Cap
$261.51 billion
Rev. per Employee
$525,006
loading...
/zigman2/quotes/203649727/composite
US : U.S.: Nasdaq
$ 31.34
-0.48 -1.51%
Volume: 40.23M
June 9, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
1.60%
Market Cap
$130.72 billion
Rev. per Employee
$427,718
loading...
/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 180.96
+0.39 +0.22%
Volume: 48.90M
June 9, 2023 4:00p
P/E Ratio
30.75
Dividend Yield
0.53%
Market Cap
$2846.27 billion
Rev. per Employee
$2.35M
loading...
/zigman2/quotes/203660239/composite
US : U.S.: NYSE
$ 223.56
+0.51 +0.23%
Volume: 6.39M
June 9, 2023 4:00p
P/E Ratio
30.44
Dividend Yield
0.81%
Market Cap
$458.30 billion
Rev. per Employee
$1.17M
loading...
/zigman2/quotes/207581792/composite
US : U.S.: NYSE
$ 369.22
+1.63 +0.44%
Volume: 2.20M
June 9, 2023 4:00p
P/E Ratio
36.87
Dividend Yield
0.62%
Market Cap
$349.72 billion
Rev. per Employee
$763,043
loading...
/zigman2/quotes/203805826/composite
US : U.S.: NYSE
$ 171.72
+0.58 +0.34%
Volume: 2.20M
June 9, 2023 4:03p
P/E Ratio
18.05
Dividend Yield
1.40%
Market Cap
$127.63 billion
Rev. per Employee
$767,025
loading...
/zigman2/quotes/228268942/composite
US : U.S.: Nasdaq
$ 9.41
-0.09 -0.95%
Volume: 4.53M
June 9, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$8.50 billion
Rev. per Employee
$660,000
loading...
/zigman2/quotes/209948968/delayed
US : U.S.: CME
$ 4,304.75
+6.50 +0.15%
Volume: 2.09M
June 9, 2023 3:59p
loading...
/zigman2/quotes/210219788/delayed
US : U.S.: CME
$ 14,742.75
+7.00 +0.05%
Volume: 186,520
June 9, 2023 3:59p
loading...
/zigman2/quotes/211347051/realtime
add Add to watchlist BX:TMUBMUSD10Y
BX : Tullett Prebon
3.74
0.00 0.00%
Volume: 0.00
June 9, 2023 5:01p
loading...
/zigman2/quotes/203558040/composite
US : U.S.: Nasdaq
$ 244.40
+9.54 +4.06%
Volume: 200.24M
June 9, 2023 4:00p
P/E Ratio
71.91
Dividend Yield
N/A
Market Cap
$774.63 billion
Rev. per Employee
$672,911
loading...
/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 180.96
+0.39 +0.22%
Volume: 48.90M
June 9, 2023 4:00p
P/E Ratio
30.75
Dividend Yield
0.53%
Market Cap
$2846.27 billion
Rev. per Employee
$2.35M
loading...
/zigman2/quotes/203755179/composite
US : U.S.: NYSE
$ 22.68
+1.24 +5.78%
Volume: 10.34M
June 9, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$6.91 billion
Rev. per Employee
$525,991
loading...
/zigman2/quotes/200235402/composite
US : U.S.: NYSE
$ 4.77
+0.09 +1.92%
Volume: 14.86M
June 9, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$7.22 billion
Rev. per Employee
$121,093
loading...
/zigman2/quotes/204905836/composite
US : U.S.: NYSE
$ 7.73
-0.06 -0.77%
Volume: 140.27M
June 9, 2023 4:02p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$12.87 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/200467500/composite
US : U.S.: Nasdaq
$ 387.70
+2.60 +0.68%
Volume: 42.77M
June 9, 2023 4:00p
P/E Ratio
201.49
Dividend Yield
0.04%
Market Cap
$957.62 billion
Rev. per Employee
$987,861
loading...
/zigman2/quotes/228268942/composite
US : U.S.: Nasdaq
$ 9.41
-0.09 -0.95%
Volume: 4.53M
June 9, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$8.50 billion
Rev. per Employee
$660,000
loading...
/zigman2/quotes/207382046/composite
US : U.S.: Nasdaq
$ 5.03
+0.34 +7.25%
Volume: 2.40M
June 9, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$32.05 million
Rev. per Employee
$66,961
loading...
/zigman2/quotes/207732364/composite
US : U.S.: Nasdaq
$ 326.79
+1.53 +0.47%
Volume: 22.53M
June 9, 2023 4:00p
P/E Ratio
35.42
Dividend Yield
0.83%
Market Cap
$2429.84 billion
Rev. per Employee
$939,326
loading...
/zigman2/quotes/208144392/composite
US : U.S.: Nasdaq
$ 124.92
+3.87 +3.20%
Volume: 75.11M
June 9, 2023 4:00p
P/E Ratio
517.91
Dividend Yield
N/A
Market Cap
$201.17 billion
Rev. per Employee
$922,680
loading...

This Story has 0 Comments
Be the first to comment
More News In
Markets

Story Conversation

Commenting FAQs »

Partner Center

Link to MarketWatch's Slice.