This 4.8% Dividend Dog Has 31% Upside Potential

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This 4.8% Dividend Dog Has 31% Upside Potential

Last month, this company cut its dividend by 48%. Five days later, its ticker was booted out of the Dow Jones Industrial Average (DJIA).

Vanilla investors fled the stock. Nonconformists like us, on the other hand, started to pay attention.

When there’s nobody left to love a dividend dog, we consider adoption. The payout was slashed 48%. This stock is 71% off its all-time highs. The Dow doesn’t love it any longer.

Sign us up for the stock that sounds like an old-time country music song, “The Ticker That’s Lost Everything.” We’ll give the herd their Nvidia (NVDA) at 36-times sales.… Read more

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Dogs of the Dow 2024: Cheap Dividends, But Are They Values?

The 2024 Dogs of the Dow are particularly homely hounds—which means we’re talking big dividends.

This year’s Dogs yield more than three-times the broader market’s paltry payout. So, should we hold our noses and buy? Let’s grab some peanut butter treats and investigate. But first, a review of the “Dogs” strategy.

The “Dogs of the Dow” strategy means buying the Dow Jones Industrial Average’s laggards. It’s a simple three-step strategy that often outperforms in the year ahead:

  • Step 1: After the final trading day of the year, identify the 10 highest-yielding stocks in the Dow.
  • Step 2: Buy all 10 stocks in equal amounts and hold them for a year.

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Snag a 5.8% Dividend From This Solid, Recession-Proof MVP

I’m admittedly a bit of a science geek. I’m glued to my phone for the latest details on the Artemis launch, I know the names of most muscles and bones, and I have memorized way too many strange facts about strange animals.

A scientifically minded approach has served me well in investing. And it’s not just in the obvious ways, through rigorous research and attention to hard numbers. The “softer” sciences of psychology and sociology also have a lot to teach us about investor behavior – and why some people make costly mistakes.

I recently read about a study conducted by Johns Hopkins researchers on the power of ignoring things.… Read more

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Introducing the 2022 Dogs of the Dow: 10 High-Yield Blue Chips Paying up to 4.9%

Once upon a time, it was hard to find an income strategy much better than the idiot-proof “Dogs of the Dow.”

And hey, in this wild market in which the S&P can drop 2% in a couple of hours, this sounds pretty good. Let’s buy some blue chips and earn 3x more income than the broader market.

Which Dogs are paying the biggest dividends for 2022? As a group these battleship businesses are paying 3.8% versus just 1.2% for the broader market. We’ll review them in a moment. First, the Dogs of the Dow rules:

  • Rule 1: After the final trading day of the year, identify the 10 highest-yielding stocks in the Dow.

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5% Decline? No Problem With This Dividend Strategy

The stock market goes up as well as down and, for whatever reason, it tends to swing wildly in September and October. With last Monday’s intraday price action, we saw our first 5% decline in a year.

The last time the S&P 500 fell by 5% or more was… this time last year.

Losing money isn’t fun. Then again, it is our job to make sure that paper losses stay on the page.

Historically speaking, this is a good month to go shopping. Last October, we locked in 7.3% to 10% dividends—and 51% total returns (in just 12 months!) soon followed.… Read more

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10 Blue-Chip “Dogs of the Dow” for 2021, with 4.1% Dividends

For income investors, dividend strategies don’t come any easier than the “Dogs of the Dow.”

But does this simple technique still work?

We’ll look at the 2021 Dogs, and their attached dividends (and prospects) in a moment. Their yields aren’t too shabby, averaging 4.1% in a 1% world! First, let’s review the mechanics of the popular contrarian strategy:

  • Step 1: After the final trading day of the year, we identify the 10 highest-yielding stocks in the Dow.
  • Step 2: We buy all 10 in equal amounts.

That’s it. In just a couple of quick steps, executed just once every year, we can put together a mini-portfolio of 10 blue-chip stocks that typically out-yield the S&P 500, and currently offer 2.5 times more dividends than the broad market index.… Read more

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Dogs of the Dow for 2020: Dividend Bargains, or Yield Traps?

The New Year is here, which means it’s once again time to revisit a contrarian (and income) investing tradition: The “Dogs of the Dow.”

This simple yet famous dividend strategy involves buying the 10 highest yielders in the 30-component Dow Jones Industrial Average at the beginning of each year.

It’s an income play, sure, but this strategy also has to do with value. The idea: Truly strong blue-chip stocks rarely become “obsolete,” so high yields—often driven by lower prices in the prior year—are just a signal that the stocks are oversold and due to bounce back.

It’s a win-win, in theory.… Read more

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Weekly Market Summary: U.S. Stocks Kick Off April With Winning Streak

The domestic stock market averages started April on a positive note and on Thursday, the S&P 500 index achieved its longest winning streak in over a year.

Taking a bit further look back, Bespoke Investment Group noted this week that it’s now been 100 days since the major U.S. indexes bottomed in late December. Highlighted in the following table, Industrial and Technology names have led the average 22% gain in the S&P 500 since then, while healthcare stocks have lagged.

Source: Bespoke Investment Group  

Full Slate of Economic News

In overseas news this week, Theresa May suffered yet another defeat in Parliament, regarding the Brexit process.… Read more

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Weekly Market Summary: U.S. Stocks Register Double-Digit Q1 Gains, Despite Inverted Yields

Investors shrugged off an inversion of the U.S. Treasury yield curve and domestic stock market averages ended the first quarter with 10%-plus gains across the board.

Trade talks resumed with China this week, as a U.S. delegation, including Treasury Secretary Steven Mnuchin, visited Beijing. The sides are expected to continue discussions next week in Washington D.C.

Inverse Reaction

There was a negative initial reaction to the 3-month U.S. Treasury yield falling below that of the benchmark 10-year note, but rates and investor sentiment leveled off throughout the week.

An inversion of the yield curve often (but not always) predicts an upcoming economic recession.… Read more

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5 Dicey Dividends to “Trade In” for Secure 5% Yields

Don’t take any dividends for granted today. Business disruption is accelerating as entire industries are being eaten alive.

Uber and Lyft? Killed cabs.

Amazon (AMZN)? It’s crushing retail, and starving their REIT landlords right before our very eyes.

And soon, these disruptors might team up to offer more same day deliveries – and make more rivals obsolete!

These types of disturbances have added a new layer to contrarian investing. In years past, it was as simple as buying stocks when they were out-of-favor and holding them until they became back in vogue. The “Dogs of the Dow” strategy, for example, usually beat the market by banking the highest blue chip dividend yields – a sign that the tide was ready to turn back in the dogs favor.…
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