A popular strategy that has been around for some time is the "Dogs of the Dow". This is not a dividend growth strategy; however, it is a method that selects Dow stocks strictly on dividend yield. What is this strategy?
Investing in the Dogs of the Dow is relatively simple. After the stock market closes on the last day of the year, of the 30 stocks that make up the Dow Jones Industrial Average, select the ten stocks which have the highest dividend yield...invest an equal dollar amount in each of these ten high yield stocks. Then hold these ten "Dogs of the Dow" for one year.
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If today were the end of the year, the following table details the Dow Dogs that would be purchased for 2007:
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Source: Dogs of the Dow
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