For most nonprofessionals, though, investing is never that simple, especially with the myriad of strategies out there. So, it behooves the average individual investor to understand what they are doing with their money. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
Why the Dogs of the Dow Were a Big Disappointment in 2023
Moreover, when you add the roughly 4% yield that the Dogs of the Dow paid, they saw their return move into positive territory at around 2%. It was the first year since 2018 that the Dogs outperformed the Dow Jones Industrials. Intel’s turnaround is still in the early stages, and the market hates the company, but the high demand for chips should be a tailwind.
Hold these stocks for a whole year and then at the end of 12 months, look at the 30 Dow stocks again and resort them by dividend yield from highest to lowest. Chevron (CVX 0.72%) did exceedingly well in 2022’s bull market in crude oil and other energy products. However, a return to more normal conditions and steady drops in prices of petroleum and natural gas weighed on revenue and profits for Chevron. Three of the four worst performers in the Dow were among 2023’s Dogs of the Dow, including the two stocks with the weakest overall returns.
Which companies were removed from the Dividend Aristocrats List in 2023?
But just like that, in a disastrous 2022, the Dogs stood up when just about everything—including the industrial average itself—fell down. The Dow Dogs, as mentioned, finished in the green on a total-return basis while the S&P 500 lost 18%. Another analysis of returns from 2008 to 2018 indicates the strategy generally works.
Best Dividend Stocks
- He was recently in the top 1.0% and 100 (73 out of over 13,450) financial bloggers, as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha.
- Furthermore, the strategy can lead to a concentrated portfolio in a limited number of sectors, especially if one sector is out of favor, e.g., oil majors during the COVID-19 pandemic.
- Whether you’re planning for future generations or seeking a reliable asset in turbulent times, this report is your essential guide to making informed decisions.
- The success of the Dogs of the Dow has a lot of investors taking a closer look at the strategy to see if it can keep outperforming in the coming year.
- This point is because the stock is thought to be temporarily oversold.
- In early May, Chevron reported (5/2/25) results for the first quarter of 2025.
Adjusted earnings-per-share of $2.77 compared to $2.71 in the prior year and was $0.19 more than expected. Results included adjustments related to the costs of acquisitions. Adjusted earnings-per-share of $4.90 compared favorably to $3.96 in the prior year and was $0.64 more than expected. Adjusted earnings-per-share came to $7.20, which was nine cents worse than expected. Revenue was up almost 10% year-over-year to $110 billion, but missed estimates by more than $2 billion. The new CEO is trying to drive the company back to a full-priced model to enhance profit margins but he believes that great patience will be required throughout this process.
- The problem for Verizon in 2023 was that rising interest rates threatened the profits of the wireless giant, particularly given the massive debt load that the company has accumulated over time.
- High dividend stocks are stocks with a dividend yield well in excess of the market average dividend yield of ~1.3%.
- For instance, Verizon’s (VZ) dividend, at nearly 7%, rivals the long-term return of the S&P 500.
- The Dogs of the Dow focuses on blue-chip stocks paying a dividend.
How the 2023 Dogs of the Dow fared
Additionally, because blue-chip companies are known for their stability and consistent dividend policies, the Dogs of the Dow strategy offers a sense of reliability to investors. This simplicity and predictability have contributed to the enduring popularity of this investment approach. The name “Dogs of the Dow” might sound intriguing, but it simply references the stocks that make up this strategy.
Understanding Dogs of the Dow
Just this month, current Dow dog Walgreens (WBA) hacked its payout by 48%, from a quarterly rate of $0.48 to $0.25 per share. Wireless contributes three-quarters of all revenues, and broadband and cable services account for about a quarter of sales. The company’s network covers ~300 million people and 98% of the U.S. For the quarter, revenue declined 1.9% to $15.5 billion, but topped expectations by $170 million. Adjusted earnings-per-share was $2.22 compared to $2.07 the prior year and beat estimates by $0.08.
These “Dogs” are not underperforming or problematic stocks; they are the highest dividend-yielding stocks among the 30 components Dogs of the dow 2023 of the Dow Jones Industrial Average (DJIA). Nothing in Contrarian Outlook is intended to be investment advice, nor does it represent the opinion of, counsel from, or recommendations by BNK Invest Inc. or any of its affiliates, subsidiaries or partners. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person.
Dividend Aristocrats List All 67 Stocks
Here are five names to watch for those who adhere to this decades-old income-and-value strategy. After a tumultuous year, this simple strategy that outperformed sagging markets might be just what you’re looking for.
With the highest yield in a decade combined with a reasonable payout ratio of 51%, INTC stock is a solid choice. They believe these five stocks are the five best companies for investors to buy now… That same day, Johnson & Johnson reported first quarter results for the period ending March 31st, 2025.
Add to that the simplicity of the strategy, and it’s easy to understand why so many people will follow the Dogs of the Dow throughout the coming year and beyond. The two stocks set to join the 2024 Dogs of the Dow list both struggled in 2023. Coca-Cola rejoined the group after a one-year hiatus, as 2022’s preference for consumer staples stocks gave way to concerns about their ability to withstand inflationary pressures and maintain cost discipline. Moreover, with hopes for a return to a faster-growth environment for sectors like technology, Coca-Cola’s reliable yet mature business suffered in terms of relative appeal, finishing the year down about 8%. Yet, investors are hopeful that 2024 will bring a return to the past successes of the Dogs of the Dow strategy.
The success of the Dogs of the Dow has a lot of investors taking a closer look at the strategy to see if it can keep outperforming in the coming year. Without further ado, here are the 10 stocks that will comprise the Dogs of the Dow for 2023, along with an explanation of the strategy behind them. The company has dealt with challenges to its product portfolio by acquiring the oral immunology drug Otzela to complement Enebrel. Moreover, Amgen has pursued a strategy of acquiring smaller companies and gaining access to new molecules, compounds and therapies. Since 2021, Amgen has acquired ChemoCentryx, Tenebio and FivePrime Therapeutics in multi-billion-dollar deals. Along these lines, VillageMD recently acquired Summit Health for primary care, Shields for specialty care and CareCentrix for post-acute care.
This is a great and simple strategy for value investors looking to purchase good businesses that are currently out of favor. The “Dogs of the Dow” strategy produces above-average income and concentrates on stocks that typically trade at lower valuations relative to the rest of the DJIA. Faring even worse was Walgreens Boots Alliance (WBA -0.13%), which was the Dow’s worst performer, with losses of close to 30% on the year. A new emphasis on building a more comprehensive healthcare business that includes making primary care clinics available to customers at its store locations has hurt short-term financial results. Are you looking for a way to invest that could potentially boost your returns? If you want to explore a strategy that has intrigued investors for years, let’s talk about the Dogs of the Dow.