AAII Stock Ideas: Dogs of the Dow Strategy Screen

Dogs of the Dow: A Contrarian High-Yield Approach

The Dogs of the Dow is a simple and purely mechanical approach that calls for an investor to buy the 10 highest-yielding stocks in the Dow Jones industrial average at the start of every calendar year. An equal dollar amount is allocated to each of those 10 stocks and the portfolio is held for 12 months. On the first trading day of the next calendar year, the process is repeated, and the portfolio is reconstructed with the newest highest yielders.

Table 1 highlights the 10 companies that passed the Dogs of the Dow screen as of December 31, 2019. To conduct a midyear checkup, AAII looked at these 10 companies passing the screen at the end of last year and updated the financial information and year-to-date performance through June 30, 2020.

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American Association of Individual Investors

American Association of Individual Investors

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Since inception in 1978, the nonprofit AAII has helped over 2 million individuals build their investment wealth through programs of education and publications.