Management would be loathed to cut it, but in the uncertain semiconductor landscape, anything is possible. Intel (INTC, $29.87) has been one of the most severely hit names in a terrible year for the tech sector. The stock is down 42% for the year-to-date, following a disappointing second-quarter performance where its EPS was off 79% year-over-year, and revenue dropped 17%. Recently reported third-quarter earnings were mixed, neither confirming recovery nor presaging disaster. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price. The Dogs of the Dow strategy produced a price change of -1.8%, beating the Dow’s performance by about 7 percentage points.
Instead, it’s a «set it and forget it» strategy that appeals to investors looking to simplify their approach while potentially reaping the benefits of dividend income and stock price appreciation. The general idea for the Dogs of the Dow strategy is to make stock picking simple and relatively safe. The Dogs of the Dow focuses on blue-chip stocks paying a dividend. The strategy is also meant to be a long-term strategy requiring less effort than constant trading. Many Dogs of the Dow pay a dividend, and a few are dividend growth stocks, but it is not strictly a dividend growth investing strategy.
The product generated $29.5 billion in 2024, up from $25 billion in 2023 and $20.9 billion in 2022. Revenue grew 8.7% to $8.1 billion, which was $60 million ahead of estimates. Core earnings-per-share grew 1%, from $1.52 to $1.54, beating the analysts’ consensus by $0.01. The firm sales amid sustained price hikes are a testament to the strength of the brands of Procter & Gamble. Sales dipped -2% but its organic sales edged up 1% over last year’s quarter, thanks to higher prices. It also encourages investors to reap the tax benefits from holding positions for at least one year before selling, thereby being taxed at the long-term capital gains tax rate instead of the short-term rate.
Dogs of the Dow #7: IBM
That said, Intel introduced Sapphire Rapids in its Xeon series of chips for data centers. Next, Intel’s impending launch of Intel 4, 7nm fabrication will make the firm’s chips more competitive versus AMD’s chips. Finally, Intel is spending tens of billions of dollars to expand its fab services with new plants in Arizona and Ohio. Next, the ARM-based chips produced by Advanced Micro Devices are eating into Intel’s PC and server market share. Intel designs and manufactures its own chips, while AMD designs and outsources manufacturing to TSMC.
Dogs of the Dow 2023: 5 Dividend Stocks for Income Investors
For the quarter, revenue grew 2.3% to $21.9 billion, which beat estimates by $330 million. For the quarter, growth was primarily due to a 14% improvement in volumes, offset by a 6% decline in pricing. Sales for Enbrel, which treats rheumatoid arthritis, were down 10% to $510 million as net selling prices were down 47% year-over-year.
But intrepid investors who take the plunge with VZ now will see this add to their already spectacular yield. Of course, all these construction plans consume capital, hence the decline in Intel’s free cash flow seen in its second-quarter report. Numerically, it’s possible that capital expenditures will squeeze the dividend.
Understanding Dogs of the Dow
You’ll also need to rebalance your holdings of stocks that stay on the Dogs list to get back to equal weightings. Dogs of the Dow is a stock picking strategy that tries to beat the Dow Jones Industrial Average (DJIA) each year by selecting the highest dividend DOW stocks. With an average dividend yield of 4.2% as of January 11, 2024, the Dogs of the Dow produces 133% more investment income on an annual basis than the Dow Jones Industrial Average, and 186% more than the S&P 500 Index. The dogs offer you exposure to seven of the market’s 11 sectors, and with an average P/E of 14.7, they trade well below the 21.6 P/E ratio of the S&P 500 and the 26.7 P/E of the Dow Jones Industrial Average. For many, though, the simplicity of the Dogs of the Dow strategy makes it worth occasional underperformance.
In mid-March, Nike released (3/20/25) results for the third quarter of fiscal 2025 (Nike’s fiscal year ends on May 31st). Sales and direct sales decreased -9% and -12%, respectively, vs. the prior year’s quarter. On April 8th, 2025, Procter & Gamble raised its dividend by 5%, from $1.0065 per quarter to $1.0568. Procter & Gamble has paid a dividend for 134 years and has grown its dividend for 69 consecutive years – one of the longest active streaks of any company.
You can see the value emphasis in the Dogs of the Dow strategy from the dividend stocks that joined and left the list in 2023. Merck (MRK 1.12%) had a huge year, with its stock jumping 45% as prospects for several of its approved and pipeline drugs improved dramatically in 2022. The soaring share price sent Merck’s dividend yield down almost a full percentage point.
- And if you are waiting for the chemical business to come back, getting paid just over 6% is a tenable position for many investors.
- Unexpected market events or economic conditions might create opportunities.
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- That compares to 12.49% annualized for the Dogs of the Dow, 10.89% for the Dow 30 and 10.76% for the S&P 500.
Stocks in the Dow 30
This selection process aims to capture the potential benefits of investing in companies with high dividend yields relative to their stock prices. As mentioned earlier, the strategy’s underlying assumption is that such companies may be at a stage in their business cycle where their stock prices could grow faster than those with lower dividend yields. This should mean that companies with a high dividend relative to stock price are near the bottom of their business cycle, so their stock price likely would increase faster than companies with low dividend yields. In this scenario, an investor reinvesting in high-dividend-yielding companies annually would hope to outperform the overall market. The process repeats, and investors identify the 10 DJIA stocks with the highest dividend yields for the current year. These new selections become the Dogs for that year, and the portfolio is adjusted accordingly.
Verizon Communications
However, lingering worries over litigation related to its talc baby powder products held back the company despite modest gains in its dividend yield. The “Small Dogs of the Dow” are the five lowest price stocks among the full pack of 10. Since 1972, the Small Dogs produced an 81,752% cumulative total return, or 13.77% annualized through the end of 2023.
Dividend Investing: Why The Dogs Of The Dow Can Still Hunt
Transformations of the kind Dogs of the dow 2023 Walgreens is undertaking take time, and in healthcare, they take a lot of time. Getting paid more than 5% to wait might seem prudent, given the macros driving healthcare. But the devil is in the details, and in healthcare, there’s a lot of them. The 2023 lineup of Dogs seems to face thornier problems than in years past.
Over the year, such stocks can rebound, potentially outperforming the broader market—a key principle of this strategy. The strategy relies on the premise that blue-chip companies do not significantly alter their dividends to reflect short-term trading conditions. Therefore, a high dividend yield relative to the stock price may indicate that a company is near the bottom of its business cycle and has potential for stock price appreciation. For more than half a century, the Dogs of the Dow has presented a compelling case that using dividend yield to gauge value among blue-chip stocks is a strategy of superior breeding for long-term success.
Meet the 2023 Dogs of the Dow
- The last time Verizon Communications (VZ, $38.55) was not among the top five Dogs of the Dow was in 2009.
- In addition, Disney (DIS) and Boeing (BA) have suspended their dividends because of challenges during the COVID-19 pandemic.
- The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
- After all, Alphabet’s (GOOGL) Google and Microsoft (MSFT) are swimming in the same pond.
His writings can be found on Seeking Alpha, InvestorPlace, Business Insider, Nasdaq, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, and leading financial sites. In addition, he is part of the Portfolio Insight and Sure Dividend teams. 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. From the bottom end of the old range, $9 billion, to the top of the new range is 30%, a big number, so it’s fair to assume management is feeling confident.
Verizon sports an eye-popping $136 billion in debt, but is a strong enough credit to be able to refinance this out into the future ad infinitum. For this reason, and its strong cash flows, Value Line rates the stock A++ for financial strength, a designation that no other telecom has, including AT&T (T). Verizon is a dividend grower, though modestly so, at an average annual rate of 2.4%.
