Projecting The 2009 Dogs of the Dow (AA, T, BAC, C, DD, GE, JPM, MRK, PFE, VZ)

December 26, 2008 by Douglas A. McIntyre

Money_stack_pic_2The Dogs of the Dow are often misunderstood as an investment vehicle.  These are technically the 10 highest dividend-yielding stocks out of the 30 DJIA components.  The formal list of the ten Dogs of the Dow has not yet been released, so don’t be too shocked if this list ends up being slightly different than what you see below:

DJIA Component (Ticker)              YIELD
Alcoa (NYSE: AA)                        7.20%
AT&T (NYSE: T)                           5.90%
Bank of America (NYSE: BAC)      9.50%   
Citigroup (NYSE: C)                      9.40%
DuPont (NYSE: DD)                      6.60%
General Electric (NYSE: GE)         7.70%
JPMorgan Chase (NYSE: JPM)      5.10%
Merck (NYSE: MRK)                     5.20%
Pfizer (NYSE: PFE)                      7.50%
Verizon (NYSE: VZ)                      5.60%

Keep in mind that the list of DJIAmay change.  General Motors was also excluded from this list becausethere is a real chance it will get booted off the index in 2009.

Be advised that we checked these from more than one source, but withall the dividends that have changed in financial stocks and othersectors we are much less willing to hang our hat on anything close toperfect information.

2008 has also been the worst year for this strategy on any recentrecord with many of these stocks down more than 50% from January1, 2008.

But be advised that the hurdle here is a 5.00% dividend yield if this list ends upbecoming the real list and if these dividends are not cut.  That hasnot happened in many years.

Jon C. Ogg
December 26, 2008