Dogs of The Dow: The Cheapest Growth Picks From The Index As Of April 2013

Dogs of the Dow Jones originally published on “long-term-investments.blogspot.com”. Each month, I screen the market by the current Dogs of the Dow Jones. The strategy “Dogs of the Dow”  is an often mentioned and well known tool for investors who don’t know what kind of assets are cheap on the market.

The philosophy is to buy 10 stocks of the Dow Jones with the highest dividend yield and lowest price to earnings ratio at the beginning of the year and to hold these stocks for a year. After this period, the investor should sell stocks that are no more Dogs of the Dow and buy therefore new Dogs of the Dow. 

Below is an updated sheet of the 10 best Dogs of the Dow. Such stocks have the lowest expected price to earnings ratio and highest dividend yield within the Dow Jones Index.

I’ve no idea if those stocks are really good investments. If I look at the current results, I would only buy a few of them but not all. For sure, every investor needs a clear strategy to follow and it's very easy to stop thinking and making research when you put each year the best dogs into your portfolio.

I truly believe that this strategy is also no guarantee for better returns but you can get new ideas for your asset allocation. The more often your target investment appears on your daily screens, the more attractive is the company.

The 10 cheapest stocks of the Dow Jones have an average dividend yield of 3.53 percent as well as a forward P/E ratio of 11.98. The average P/B ratio amounts to 2.76 and P/S ratio is 2.40.

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