As we get to the end of each year, investors begin to look at the “DOGS OF THE DOW.”

This is a portfolio the 10 highest yielding stocks out of the 30 Dow Jones Industrial Average stock components.  Some investors even take this a step farther and go for the Dow 5 by only looking at the 5 highest yielding components in the index.  We decided to compile a list of these stocks as it stands today, but please recall this may change before January 1, 2007 as we still have more than two weeks of trading before New Years.

These are listed in order by the highest yielding first.  The 10 Dogs of the Dow have one change on a preliminary basis: AT&T (T) has been added and Coca-Cola (KO) has been dropped, and the order is different and the top 5 area different in those smaller “5 Down Dogs” stocks.  This list includes the market cap of each stock, the current dividend yield, the 52-week trading range, the price change off the low of the year, and we even put the price-to-book ratio for each stock. 

Here is the preliminary list of stocks:

Verizon (VZ) $35.46:  Market Cap $103.53B; Yield 4.60%
52-Week Range: $30.00 to $38.95 (+$5.53);   Price/Book: 2.25 

Altria (MO) $84.68: Market Cap $177.48B;  Yield  4.10%
52-Week Range: $68.36 to $85.55 (+$16.38);  Price/Book: 4.33    

Citigroup (C) $51.96: Market Cap $255.31B; Yield 3.80%
52-Week Range: $44.81 to $52.88 (+$7.18); Price/Book: 2.22

Pfizer (PFE) $25.16:   Market Cap $181.41B; Yield  3.80%
52-Week Range: $20.27 to $28.60 (+$4.88);  Price/Book: 2.61   

AT&T (T) $35.48:  Market Cap $136.35B; Yield  3.80%
52-week range: $24.24 to $35.33 (+$11.23);  Price/Book: 2.45      

Merck (MRK) $43.54:  Market Cap $94.53B;  Yield 3.50%      
52-Week Range: $27.99 to $46.37 (+$15.63);  Price/Book:  4.96   

General Motors (GM) $29.70: Market Cap $16.80B;  Yield  3.40%   
52-Week Range: $18.33 to $36.56 (+$11.40);   Price/Book:  1.52      

DuPont (DD) $46.83: Market Cap $43.07B;  Yield 3.20%   
52-Week Range: $38.52 to $48.87 (+$8.31);  Price/Book: 4.41   

General Electric (GE) $35.60: Market Cap $367.5B;  Yield  3.14%       
52-Week Range: $32.06 to $36.48 (+$3.12)   Price/Book: 3.26   

J.P.Morgan (JPM) $47.60:    Market Cap $165.12B;  Yield  2.90%   
52-Week Range: $37.88 to $48.57 (+$9.73);   Price/Book: 1.45    

It may be worth noting that J&J (JNJ), Home Depot (HD), McDonalds (MCD), and 3M (MMM) all have roughly a 2.3% yield; and Coca-Cola (KO) has a 2.5% yield.  So if any of the lower-yielding preliminary Dogs have a substantially rally or if any of these "almost Dogs" see their share prices fall sharply then you could see a change to these names.  Also, this list does include the change to GE based on their dividend hike today.

Jon C. Ogg
December 12, 2006

Also, it may be worth noting that that this data was taken from sources deemed reliable but no assurances can be made as to the accuracy of any claims or figures.  Please verify all data on your own before making any investment decisions.  The author of this report does not own securities of the companies mentioned.

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