Investing

Meet the Full 2016 Dogs of the Dow for Massive Dividends

IBM

> Dividend yield: 3.78%
> 2015 closing: $137.62
> 52-week range: $131.65 to $176.30
> Analyst target: $148.85
> Market cap: $133.5 billion

International Business Machines Corp. (NYSE: IBM) is a Dogs of the Dow member due to poor performance. While IBM has raised its dividend and keeps buying back stock, its shares were down by 11.4% in 2015. The 3.78% dividend yield may not be enough to stave off declining core business concerns and lower backlogs. IBM just cannot grow its new efforts fast enough to make a huge dent. IBM is even considered a classic value trap because no one is willing to pay over 10 times earnings here.

Exxon Mobil

> Dividend yield: 3.75%
> 2015 closing: $77.95
> 52-week range: $66.55 to $93.45
> Analyst target: $83.52
> Market cap: $324.5 billion

Exxon Mobil Corp. (NYSE: XOM) also has suffered from lower oil and gas prices, just like Chevron, and its 3.75% yield made that -12.8% performance less negative than it would have been. Exxon Mobil is a large buyer of its stock and is protecting its dividend, with an emphasis on the dividend protection. Its dividend seems safer than Chevron’s, which may be why Chevron outyields Exxon.

Pfizer

> Dividend yield: 3.72%
> 2015 closing: $32.28
> 52-week range: $28.47 to $36.46
> Analyst target: $40.44
> Market cap: $199.3 billion

Pfizer Inc. (NYSE: PFE) ended 2015 with a 3.72% yield. The drug giant is now involved in a merger with Allergan, which may or may not end up being approved and which may or may not be allowed to be a tax inversion. Pfizer closed up 7% in total return, but over half of that gain was due to the dividend. Pfizer also just raised its dividend at year’s end.

Merck

> Dividend yield: 3.48%
> 2015 closing: $52.82
> 52-week range: $45.69 to $63.62
> Analyst target: $62.26
> Market cap: $147.6 billion

Merck & Co. Inc. (NYSE: MRK) has been restructuring like Pfizer, but its merger risks might be less present today than its DJIA rival. That may explain why its dividend yield is 3.48%, and Merck lost almost 3.9% in 2015. Could Merck have less event risk than Pfizer? Both companies may have pricing and patent risks as ongoing issues.

Procter & Gamble

> Dividend yield: 3.34%
> 2015 closing: $79.41
> 52-week range: $65.02 to $92.55
> Analyst target: $83.24
> Market cap: $216.0 billion

Procter & Gamble Co. (NYSE: PG) lost almost 10% in 2015, and the restructuring hasn’t seemed to help. The company still wants to get rid of more product groups to focus on core and growth markets. Now it yields 3.34%, but its valuation at over 18 times earnings just doesn’t feel cheap yet. Maybe Procter & Gamble can have a better 2016, as analysts are looking for a 5% price gain, before taking the yield into consideration.

Wal-Mart

> Dividend yield: 3.20%
> 2015 closing: $61.30
> 52-week range: $56.30 to $90.97
> Analyst target: $63.63
> Market cap: $196.3 billion

Wal-Mart Stores Inc. (NYSE: WMT) was the worst performing stock on the Dow in 2015 (-26.6%). Its dividend yield of 3.2% is so high solely because of the drop in the stock. Wal-Mart has higher wages to blame, but store sales just aren’t exactly taking off here and growth prospects may be limited. Being the world’s largest retailer by far means that maybe that Wal-Mart just needs to work on its earnings and dividends — while it buys back billions in stock too.

Cisco Systems

> Dividend yield: 3.09%
> 2015 closing: $27.16
> 52-week range: $23.03 to $30.31
> Analyst target: $30.63
> Market cap: $137.8 billion

Cisco Systems Inc. (NASDAQ: CSCO) has raised its dividend, making it the highest technology dividend. It also edged out the likes of General Electric for the tenth spot on the list. That came down to the wire for 2016. Cisco’s growth is being driven by growth markets, but the dollar and slower growth outside of the United States have both kept results mixed here. At least investors know Cisco will keep buying back stock, and it has room to raise that dividend ahead, with a valuation at less than 12 times forward earnings.


Again, the Dogs of the Dow is a dividend strategy for investors to buy what are either “cheap” or “beaten up” Dow stocks. Unfortunately, 2015 was an awful year for the members of the Dogs of the Dow. Will 2016 reverse that?

A view below has been gather from FINVIZ:

2016 Dogs of the Dow
Source: Jon Ogg

Sponsored: Tips for Investing

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.