Dogs of the Dow: The Simple Stock Picking Strategy that Works

Meet the Dogs

No question about it, investing is a dog-eat-dog world. Traders are constantly developing and revising strategies in order to make the most money in the stock market. Throughout time many strategies have come and gone, few sustaining any significant longevity.

However, over the past decades, Michael O’Higgins’ strategy coined “Dogs of the Dow” has built a reputation as a relatively easy and dependable long term investment strategy.To understand the Dogs of the Dow, first you need to familiarize yourself with the Dow Jones Industrial Average. Created in 1896 by Charles Dow, the “Dow” is an index that tracks the performance of the 30 largest NYSE and NASDAQ companies. Since its inception, the Dow Jones has become arguably the most popular index and is the most common metric for measuring the overall health of the U.S stock market.

Recognizing the how synonymous the Dow was with the performance of the broader market, O’Higgins sought out a strategy that would “beat the Dow.” In his mind, if you were beating the Dow then you were also beating the market, every investor’s ultimate goal.

After some experimentation, O’Higgins settled on a simple set of steps. At the end of each year, calculate the dividend yields of each of the 30 Dow Jones’ stocks. Select the 10 stocks with the highest dividend yields and invest equal amounts in each of them. Hold the stocks and collect their dividends until year end and then repeat the process. Simple enough, right?

So, if we do the calculations as of June 30, 2018, here is the Dow 30 ranked by dividend yield. The top 10 would be O’Higgins’ “Dogs”.

Dogs of the Dow (June 30th, 2018)

Stock Symbol Company Name Dividend Yield Closing Price Annualized Dividend
VZ Verizon 4.65% $50.75 $2.36
IBM IBM Corp 4.21% $149.24 $6.28
XOM Exxon Mobil 4.00% $82.01 $3.28
CVX Chevron Corp 3.68% $121.67 $4.48
PG Procter & Gamble 3.64% $78.73 $2.87
PFE Pfizer 3.64% $37.36 $1.36
KO Coca-Cola Co. 3.46% $45.11 $1.56
CSCO Cisco Systems 3.11% $42.40 $1.32
MRK Merck 3.07% $62.51 $1.92
JNJ Johnson & Johnson 2.86% $125.94 $3.60
WBA Walgreens Boots Alliance, Inc. 2.71% $64.93 $1.76
MMM 3M 2.70% $201.60 $5.44
MCD McDonald’s 2.57% $157.41 $4.04
CAT Caterpillar Inc. 2.47% $139.42 $3.44
TRV Travelers Co. 2.46% $125.18 $3.08
WMT Wal-Mart Stores 2.37% $87.72 $2.08
INTC Intel Corp 2.31% $51.98 $1.20
DWDP DowDuPont Inc. 2.30% $66.14 $1.52
UTX United Technologies 2.15% $130.36 $2.80
JPM JP Morgan Chase 2.04% $109.89 $2.24
HD Home Depot 2.03% $202.63 $4.12
BA Boeing Co. 1.92% $355.33 $6.84
MSFT Microsoft 1.61% $104.40 $1.68
AAPL Apple Inc. 1.52% $191.88 $2.92
DIS The Walt Disney Company 1.50% $112.13 $1.68
UNH UnitedHealth Group 1.42% $252.93 $3.60
AXP American Express 1.40% $100.17 $1.40
GS Goldman Sachs 1.39% $229.63 $3.20
NKE Nike Inc. 1.04% $76.95 $0.80
V Visa 0.60% $140.13 $0.84


For clarification, a company’s dividend yield is the ratio of its dividend to share price. O’Higgins chose to select by dividend yield because he believed that Dow stocks set their dividend amounts based on the average worth of their company. This idea, paired with the idea that share price moves according to where a company stands in the business cycle, means that a high dividend to low share price ratio creates a perfect opportunity for investment. In other words, a high dividend yield communicates that a firm has high worth and a high potential for growth.

Of course, this model is based on several key assumptions, but over time his strategy has consistently outperformed the Dow. It has proved to be an accessible and reliable model, perfect for new investors and long term traders. If you’re looking to get started in the stock market but don’t know where to begin, consider the Dogs of the Dow strategy. After all, numbers don’t lie.


5 Stocks to Buy Now

If you wanna get your feet wet with the Dogs of the Dow strategy, use your Wall Street Survivor account to buy Verizon, IBM, Exxon, Chevron, and Procter & Gamble. Try it out for size and, when year end comes around, think about using this strategy to start building your real stock portfolio!

*** SPECIAL ALERT — July 25, 2020 — TWO of this Year’s Motley Fool Stock Picks Have Already Tripled and Two have Doubled! ****

We have been tracking ALL of the Motley Fool stock picks since January 2016. That’s 4+ years, 54 months and 108 stock picks. As of Friday, July 24th 2 of their 12 2020 stocks picks have already tripled (TSLA, SHOP). In addition, 4 of their 2019, 8 of their 2018, 7 of their 2016 and 10 of their 2016 picks have also doubled. Best of all, over these 54 months, the average stock pick is up 111%. That beats the SP500 by an average of 87%. And that’s even accounting for all of this COVID mess that has wreaked havoc on some stocks but presented opportunity for other stocks. THAT is how the Fool does so well!

  • Shopify (SHOP) – April 2, 2020 pick and it is already up 163%
  • Zoom Video (ZM) – March 19, 2020 pick and it is already up 107%
  • DexCom (DXCM) picked Feb 20, 2020 right before the market crashed and it is still up 26%
  • Tesla (TSLA) picked January 2, 2020 before the crash and it is up 123% compared to the SP500 -7% so it is ahead of the market by 130%
  • HubSpot (HUBS) picked December 5, 2019 and it is up 46%
  • Netflix (NFLX) picked November 21, 2019 and it is up 42%
  • Trade Desk (TTD) picked November 11, 2019 and up 111%
  • Zoom Video originally picked Oct 3 and it is up 234%
  • SolarEdge (SEDG) picked September 19, 2019 and it is up 44%

Now, no one can guarantee that their next picks will be as strong, but our 4.5 years of experience has been super-profitable. They also claim that since inception, their average pick is up 424% and now we believe them. You sure don’t want to risk missing out. Many analysts are saying that we have passed the bottom of this COVID crisis and stocks will recover quickly. So make sure you have the best stocks in your portfolio.

Normally the Fool service is priced at $199 per year but they are currently offering it for just $99/year if you click this link

CLICK HERE to get The Motley Fool’s Stock Picks for just $99 per Year! 



Robinhood was the first brokerage site to NOT charge commissions when they opened in 2013. They just past 10,000,000 accounts and to celebrate they are offering up to $1,000 in free stock when you open a new account.

Here’s the details: You must click on a special promo link to open your new Robinhood account. Then when you fund your account with at least $10, you will receive one stock valued between $5 and $500. Then, you will get a link to share with your friends. Every time one of your friends opens an account, you will receive another free stock valued between $5 and $500. Click here to learn more about this Special Robinhood offer.

Claim your free stock NOW

(before it’s too late)

Leave a Reply

Your email address will not be published. Required fields are marked *