The Rise of the Dogs of Dow Strategy
The Dogs of Dow strategy, pioneered by Michael O’Higgins and immortalized in his book “Beating the Dow,” has long been a symbol of hope for investors seeking to outshine the broader market. Originating with companies listed on the Dow Jones, the strategy has extended its superiority to European stock market indexes.
The strategy involves selecting the 10 companies with the highest dividend yield at the close of the last trading session of the year and holding an equal number of shares from each of these 10 companies throughout the entire year. An exercise in simplicity and elegance, it promises superior returns and has delivered on this promise throughout history.
From 1957 to 2003, this strategy demonstrated an average annual return of +14%, outperforming the Dow Jones’ average annual return of +11% during the same period. Even in more recent times, from 2010 to 2017, the strategy continued to surpass the Dow Jones.
The Untapped Potential of the 2024 Stocks
In the upcoming year of 2024, the stocks constituting the Dogs of Dow strategy, along with their respective dividend yields, exhibit immense potential to outshine the broader market. Walgreens Boots Alliance, Verizon Communications, 3M Company, Dow, IBM, Chevron, Coca-Cola, Amgen, Cisco Systems, and Johnson & Johnson are the carefully selected contenders to fuel the returns of hopeful investors.
Walgreens Boots Alliance: A Pharmaceutical Powerhouse
Walgreens Boots Alliance, standing testament to longevity and stability, pays a dividend of $0.25 per share, with a dividend yield of +4.30%. The company, with a century-long legacy, has consistently proven itself as a stalwart in the pharmaceutical sector. CEO Timothy Wentworth’s recent acquisition of shares further instills confidence in the company’s future trajectory, and the market perceives substantial potential with a target of $26.18.
Verizon Communications: Redefining Communication and Technology
Verizon Communications, a trailblazer in the communication and technology domain, boasts a dividend yield of +6.90%. As the company anticipates revenue growth of +1.5% for the year 2024, the market envisions a promising future, setting potential at $41.97. However, InvestingPro models paint an even brighter picture, forecasting a target of $45.84.
3M Company: Innovation at Its Core
3M Company, a beacon of innovation, unfolds opportunities with a dividend yield of +5.49%. Continuously adapting and thriving, the company remains a pivotal player in the market. With expectations of surging revenue growth in the years to come, the allure of 3M Company is further accentuated. The stage is set for this stalwart to elevate investor portfolios.
Unveiling the Future: Analyzing 3M, Johnson & Johnson, and Cisco Systems
3M, a stalwart of the industrial sector, has been dedicated to pioneering cutting-edge technologies since its inception in 1902. Headquartered in St. Paul, Minnesota, the company has carved its niche in developing and commercializing a diverse array of products and services across various sectors. With a loyal shareholder base, 3M currently offers a robust dividend yield of +5.55%.
We can anticipate the unveiling of 3M’s financial report on January 23, which is poised to reveal a 2024 EPS surge of 7.7% and a commendable revenue growth of +3%.
Exploring 3M’s Financial Outlook
The market anticipates a bright future for 3M, with perceived potential reaching $114.26. However, InvestingPro’s models project an even more optimistic outlook, pegging the potential at $134.69.
Johnson & Johnson: Nurturing Growth
Johnson & Johnson, an illustrious name in the realm of healthcare and consumer goods, has been at the forefront of developing and selling a myriad of baby care products since 1886. Based in New Jersey, the esteemed company boasts a compelling dividend yield of +2.93% and will dispense a dividend of $1.19 per share on March 5.
As we approach the upcoming announcement of its financial standings on January 23, expectations loom large for a remarkable 8.1% escalation in earnings per share (EPS) and a robust revenue growth of +3.1% in 2024.
Insights into Johnson & Johnson’s Performance
Analysts foresee an optimistic projection for Johnson & Johnson’s shares, estimating a value of around $174.68.
Cisco Systems: Pioneering Technology
Adorned in the tech landscape, Cisco Systems has been a trailblazer in designing, manufacturing, and retailing products associated with the information and communications technology industry. Established in 1984 and headquartered in San Jose, California, Cisco Systems currently offers an alluring dividend yield of +3.10%.
Mark your calendars for February 14, as that’s when Cisco Systems will reveal its financial performance.
Navigating Cisco Systems’ Foresight
With 28 ratings, including 9 buy, 18 hold, and 1 sell, the market envisions Cisco Systems to reach $53.97. Meanwhile, InvestingPro’s forecasts paint an even rosier picture, setting the trajectory at $56.77.
