The Dow Jones industrial average is a price-weighted average of 30 blue-chip U.S. stocks, often industry leaders. It is the oldest U.S. market index, dating back over 100 years, and has been a widely followed stock market indicator since 1928. The Dow is considered the world’s most recognizable stock indicator and is the only index comprised of companies that have consistently performed well over an extended period. So far in 2025, the Dow is up 5.1%, almost double the S&P 500.

The Dogs of the Dow is a well-known strategy first published in 1991 by Michael Higgins. The plan seeks to maximize the yield of investments by buying the 10 highest-paying dividend stocks available from the Dow Jones industrial average each year. The highest-yielding stocks are also the lowest-priced stocks in the venerable average, as the lower a stock (or bond) goes in price, the higher the attached yield or coupon becomes. We think the two highest-yielding Dogs can be a safe haven for your portfolio as the stock market goes through a significant consolidation period, if not now, at some point this year.

Why do we cover the Dogs of the Dow?

Since the turn of the century, the Dogs of the Dow have significantly outperformed the overall Dow Jones industrials, and the Small Dogs of the Dow, which are the five highest-yielding stocks, even more. The fact that investors are buying the highest-yielding companies in the venerable index improves the chances for total return gains.

Chevron

This integrated giant is a safer option for investors looking to position themselves in the energy sector. It has a sweet 4.37% dividend. Chevron Corp. (NYSE: CVX) engages in integrated energy and chemicals operations worldwide through its subsidiaries. And it  operates in two segments.

The Upstream segment is involved in the following:

• Exploration, development, production, and transportation of crude oil and natural gas
• Processing, liquefaction, transportation, and regasification associated with liquefied natural gas
• Transportation of crude oil through pipelines; and transportation, storage
• Marketing of natural gas, as well as operating a gas-to-liquids plant

The Downstream segment engages in:

• Refining crude oil into petroleum products
• Marketing crude oil, refined products, and lubricants
• Manufacturing and marketing renewable fuels
• Transporting crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car
• Manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives

It also involves cash management, debt financing, insurance operations, real estate, and technology businesses.

Chevron announced in the fall of 2023 that it has entered into a definitive agreement with Hess Corp. (NYSE: HES) to acquire all of the outstanding shares of Hess in an all-stock transaction valued at $53 billion, or $171 per share based on Chevron’s closing price on October 20, 2023. Under the terms of the agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. The transaction’s total enterprise value, including debt, is $60 billion. It should finally close this summer.

Verizon

This top telecommunications company offers tremendous value, trading at 8.75 times estimated 2025 earnings and paying investors a strong 6.92% dividend. Verizon Communications Inc. (NYSE: VZ) provides communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide through two segments.

The Consumer segment provides wireless services across the wireless networks in the United States under the Verizon and TracFone brands and through wholesale and other arrangements.

It also provides fixed wireless access (FWA) broadband through its wireless networks and related equipment and devices, such as:

• Smartphones
• Tablets
• Smartwatches and other wireless-enabled connected devices

The segment also offers wireline services in Mid-Atlantic, including the District of Columbia, and Northeastern United States through its fiber-optic network, Verizon Fios product portfolio, and a copper-based network.

The Business segment provides wireless and wireline communications services and products, including:

• FWA broadband
• Data
• Video and conferencing
• Corporate networking
• Security and managed network
• Local and long-distance voice

Network access services to deliver various IoT services and products to businesses, government customers, and wireless and wireline carriers in the United States and internationally.

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