Dogs of the Dow Jones originally published on “long-term-investments.blogspot.com”. As you might know, I also cover some popular indices and investing strategies and present great picks from the selection.
One investment strategy that I cover and would like to update today is the Dogs of the Dow Jones investing rule. The popular investment theory was introduced by Michael O’Higgins in 1991 and became very popular over the time.
The philosophy behind is to buy ten 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 ten best Dogs of the Dow. They have the lowest expected price to earnings ratio and highest dividend yield within the Dow Jones index.
Summarized, the 10 cheapest stocks of the Dow Jones have an average dividend yield of 3.56 percent as well as a forward P/E ratio of 24.62. The average P/B ratio amounts to 2.65 and P/S ratio is 2.46.
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