Meet the 2017 Dogs of the Dow: Massive Dividends and Expected Upside

2. Pfizer
 > Yield: 3.60%

Pfizer Inc. (NYSE: PFE) had closer to a 3.75% yield in early December, but a rally made its 3.60% yield still better than rival Merck. Pfizer shares were up only about 2% so far in 2016, versus almost 19% for Merck. One problem for Pfizer is that it largely has been ignored by investors in the post-election rally, and there is the concern that Trump has said he is concerned and not happy about drug price trends in America.

Shares of Pfizer recently closed at $32.48, with a consensus price target of $37.65 and a 52-week range of $28.25 to $37.39.

3. Chevron
 > Yield: 3.73%

Chevron Corp. (NYSE: CVX) handily outyielded Exxon Mobil as the oil giant rivals seek to entice shareholders. Chevron shares performed quite well in 2016, with a return of 36% for the year and just over 5% in December. Chevron in the past also has promised more dividend hikes, and the oil price rise may allow that to continue. Now the oil tycoons are excited about oil and energy under a Trump administration.

Shares of Chevron last closed at $117.70. The stock has a consensus price target of $119.65 (almost $3 higher than the start of December) and a 52-week range of $75.33 to $119.00.

4. Boeing
 > Yield: 3.65%

Boeing Co. (NYSE: BA) saw its dividend yield rise by leaps and bounds at the end of 2016 due to a much larger dividend hike than some of us anticipated. Its gain was 3.4% in the last 30 days, but its return was listed as 11% in 2016. It remains to be seen if Boeing can raise its dividends by unexpected amounts over and over ahead.

Trump has tweeted that the multibillion dollar cost for Air Force One is ridiculous, and its 787 Dreamliner is seeing orders trimmed down due to economics of flight. Still, this was an impressive jump in the rank of Dow dividend yields.

Boeing closed at $155.68 at the end of 2016, with a 52-week range of $102.10 to $160.07 and with a consensus target price of $156.50.

5. Cisco Systems
 > Yield: 3.44%

Cisco Systems Inc. (NASDAQ: CSCO) treaded water at the end of 2016 due to much of its business coming from growth and emerging markets. Still, it could be a huge winner in overseas cash repatriation efforts (if successful) in 2017. Cisco remains the king of dividend yields in the largest technology stocks, and it also keeps buying back stock as well.

Cisco’s position has remained firm as a networking, data center and security leader, and it has raised dividends handily since it began paying out. Cisco even suggested more dividends and buybacks if it gets to repatriate its $60 billion or so in overseas cash. Its 3.4% yield contributed to the 15.1% gain seen in 2015, but it rose just 1.3% in December and was negative for the last quarter.

Cisco shares closed out 2017 at $30.22, in a 52-week range of $22.46 to $31.95 and versus a consensus price target of $33.11.

6. Caterpillar
 > Yield: 3.41%

Caterpillar Inc. (NYSE: CAT) remains a challenging business, and all the infrastructure hopes were not even given huge upside when Caterpillar gave its 2017 guidance. Still, it was the best performing Dow stock in 2016 with a return of 42.1% for the year (even with close to −3% in December).

This gain was far from expected, and most of it was long before the post-election rally when Trump talked up infrastructure galore. Its dividend yield would have even been stronger had the performance not been so high.

Caterpillar shares closed out 2016 at $92.74, in a 52-week range of $56.36 to $97.40. The consensus price target is now $86.89, up over $3 just in the past month alone.

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