Meet the 2011 Dogs of the Dow (CVX, DD, GE, JNJ, KFT, MCD, MRK, PFE, PG, T, VZ, INTC)

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The Dogs of the Dow is an investment strategy which annually selects the ten highest dividend yields of all thirty Dow Jones Industrial Average components.  Because we are going for the timeless data, share prices are not included and we will update the list if there are any major price changes that disrupt the 2011 Dogs of the Dow.

The preliminary Dogs of the Dow for 2011 have changed slightly over the last month.  There is only one trading session left after today, so this list should hold barring any major share price moves in DJIA components.  The 2011 Dogs of the Dow are as follows, with dividend yield and with a Thomson Reuters 1-year forward consensus analyst price target:

Chevron Corp. (NYSE: CVX) with a 3.2% dividend yield and a target price of $94.88;

EI DuPont de Nemours & Co. (NYSE: DD), or DuPont, with a 3.3% dividend yield and a target price of $54.80;

General Electric Co. (NYSE: GE) with a 3.1% dividend yield and a target price of $21.00;

Johnson & Johnson (NYSE: JNJ) with a 3.5% dividend yield and a target price of $67.84;

Kraft Foods Inc. (NYSE: KFT) with a 3.6% dividend yield and a target price of $35.00;

McDonald’s Corp. (NYSE: MCD) with a 3.2% dividend yield and a target price of $86.00;

Merck & Co. Inc. (NYSE: MRK) with a 4.2% dividend yield and a target price of $42.20;

Pfizer Inc. (NYSE: PFE) with a 4.6% dividend yield and a target price of $21.23;

AT&T, Inc. (NYSE: T) with a 5.9% dividend yield and a target price of $30.93;

Verizon Communications Inc. (NYSE: VZ) with a 5.5% dividend yield and a target price of $33.24.

The runner ups are Procter & Gamble Co. (NYSE: PG) with a 3.01% dividend yield and Intel Corporation (NASDAQ: INTC) with its implied 2.99% yield. That is a close enough race with Intel and P&G that this will need to be kept in view going into 2011. As you will see, the cut off is above 3% for dividend yields.  Now you know the hurdle for other dividend stocks to be considered a “high yield dividend” in non-DJIA stocks.  This strategy is often employed by dividend investors looking for income and value alike.

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JON C. OGG