24/7 Wall St.

The Dogs of the Dow are the 10 stocks in the Dow Jones Industrial Average that are the highest yielding at the beginning of each year. Some years this gang of 10 has an outstanding year and really leads the pack. In other years, especially when momentum rules, they often trail. With energy starting to rebound and worried investors looking at the worst start of the year in decades, investors seeking value have been looking at the dogs.

An interesting chart from Jefferies shows the Dogs of the Dow versus the other Dow members not in the group. So far this year, based on changes in yields, the dogs are doing much better, as their yields have not widened out near as much as the other 20 companies. That means the stock prices have performed better as yields go higher when a stock’s price falls.

Here we focus on the four companies that are still yielding 4% or more.

Verizon Communications

This top telecommunications company recently did away with some phone incentives. Verizon Communications Inc. (NYSE: VZ) is a global leader in delivering the digital world. Verizon Wireless operates America’s self-described most reliable wireless network, with 109.5 million retail connections nationwide. Verizon also provides converged communications, information and entertainment services over America’s most advanced fiber-optic network and delivers integrated business solutions to customers worldwide.

Wall Street has applauded Frontier’s acquisition of Verizon’s wireline operations in California, Florida and Texas, which is expected to be completed at the end of this month. Many feel that focusing on the higher margin segments at Verizon makes sense, and the sale to Frontier is a huge cash boost to the balance sheet. The company reported solid fourth-quarter numbers with earnings slightly higher than some Wall Street estimates and revenues above the street consensus too.

There was some chatter last month that Verizon was enlisting the aid of the firm’s AOL unit CEO Tim Armstrong to help with a leading role in exploring a possible bid for Yahoo assets. Verizon has not officially started any negotiations, and the rumors are just that, but the company has said in the past it is open to acquiring additional assets.

Verizon investors receive a massive 4.34% dividend. The Thomson/First Call consensus price objective is $50.33. Shares closed Wednesday at $52.12.

24/7 Wall St.
Jefferies Top Value Stocks to Buy All Pay Big Dividends