The lineup of the Dogs of the Dow, simply the ten highest dividend yield stocks of the thirty Dow Jones Industrial Average components, appears to be undergoing a bit of change for 2012. There is a significant horserace taking place for the number-ten spot on the 2012 Dogs. The average yield comes to about 4% depending upon the final order.
The nearly certain nine Dogs of the Dow are as follows: AT&T Inc. (NYSE: T); Verizon Communications Inc. (NYSE: VZ); Merck & Company, Inc. (NYSE: MRK); Pfizer, Inc. (NYSE: PFE); General Electric Co. (NYSE: GE); E.I. du Pont de Nemours (NYSE: DD); Johnson & Johnson (NYSE: JNJ); Intel Corporation (NASDAQ: INTC); and The Procter & Gamble Company (NYSE: PG). The horserace for the tenth spot on the Dogs is taking place among three DJIA components, with a distant fourth in the running: Microsoft Corporation (NASDAQ: MSFT); Kraft Foods Inc. (NYSE: KFT); Chevron Corporation (NYSE: CVX); and J.P. Morgan Chase & Co. (NYSE: JPM).
Here is the current expected order of the 2012 Dogs of the Dow, with dividend yields included:
- AT&T Inc. (NYSE: T) 5.9%
- Verizon Communications Inc. (NYSE: VZ) 5.2%
- Merck & Company, Inc. (NYSE: MRK) 4.5%
- Pfizer, Inc. (NYSE: PFE) 3.7%… After the most recent dividend hike which has not been paid out, the new yield will be 4.06% rather than a rounded off 3.7%.
- General Electric Co. (NYSE: GE) 3.6%
- E.I. du Pont de Nemours (NYSE: DD), or DuPont, 3.6%
- Johnson & Johnson (NYSE: JNJ) 3.5%
- Intel Corporation (NASDAQ: INTC) 3.4%
- The Procter & Gamble Company (NYSE: PG) 3.14%
The four DJIA stocks competing for the tenth-spot:
- Microsoft Corporation (NASDAQ: MSFT) 3.07%
- Kraft Foods Inc. (NYSE: KFT) 3.08%
- Chevron Corporation (NYSE: CVX) 3.03%
- J.P. Morgan Chase & Co. (NYSE: JPM) 2.98%
What is so interesting about this list is that Microsoft is entering the Dogs for what may be the first time ever. McDonald’s Corporation (NYSE: MCD) is actually not in the list this year. Those which have recently raised dividends outside of Microsoft are AT&T, Merck, Pfizer, and G.E.
If you average the top nine DJIA yields, investors get an average of about 4.06%. If you include a 3.05% average for the competing four to go into the tenth spot, then the average dividend yield comes to 3.96%. As far as how this compares to the 2011 list, the lowest yield a year ago was roughly 3.1% as well.
Is it any coincidence that the average yield last year among the ten Dogs was 4.01%? Here is the 2011 Dogs of the Dow review from a year ago for comparison.
JON C. OGG