It is no secret that the bull market’s strength heading into 2018 is nearing uncharted territory. Wall Street strategists have recently raised their 2018 stock market expectations after the passage of tax reform. And investors still love their dividends, particularly safe and rising dividends.

One strategy that has been popular each year as investors rebalance and make changes is the Dogs of the Dow. While the term “dog” may sound quite negative, this is the 10 highest dividend yields in the Dow Jones Industrial Average.

24/7 Wall St. and its founders have tracked the Dogs of the Dow strategy for years now. Short-term interest rates have risen in 2017, but long-term rates remain lower than many strategists would have expected. Those Treasury rates also still look quite low by historical standards at a time when growth is picking up. Very few investors seem to be worried that interest rates are going to rise enough to wreck the stock market or the economy.

The 2017 Dogs of the Dow had an average yield of 3.6%, and the preliminary list of the Dogs of the Dow for 2018 looks to be closer to a yield of 3.1%. That being said, we currently have 11 “dogs” rather than 10 due to the controversy of General Electric. If we just use the 10 ‘dogs” then we have a median yield of closer to 3.3%.

One issue that has driven down the average yield for this preliminary 11 (which will be 10 on January 1) is that the Dow was up 25% so far in 2017, if you include dividends. As a reminder, as a stock price rises its yield comes down on a static basis without a company raising its payout.

Most Dogs of the Dow companies should be expected to raise their dividends in 2018. Also, many of the stock prices at the end of 2017 have implied upside to the Thomson Reuters consensus analyst price targets for the next 12 months.

While investors still love dividends, the reality is that the current Dogs of the Dow picked for 2018 are all serious laggards in 2017. Only Cisco has outperformed the Dow, and four of the Dogs were still negative in 2017.

Some of the top Dow stocks have now raised their dividends for 25 to 50 consecutive years. With repatriation of foreign cash and lower tax rates, some of these companies could handily raise dividends. Some may choose buybacks.

For a comparison, the yield on the 10-year Treasury was close to 2.45% and the 30-year Treasury was roughly 2.83%. We have used Thomson Reuters for consensus analyst target price data. We have offered a detailed view of the 2017 Dogs of the Dow for a comparison.

Here are the 11 candidates for the Dogs of the Dow in 2018. Again, there will be only 10 once the end of 2017 is final in a few days.

1. Verizon
> Yield: 4.44%

Verizon Communications Inc. (NYSE: VZ) may still have a lower dividend than rival (and former Dow member and Dog) AT&T, but it has managed to get back to almost flat for 2017. Verizon has a history of raising its payouts year after year. Verizon’s consensus analyst target price is $51.83, while shares were last seen trading near $53.50.

2. IBM
> Yield: 3.93%

International Business Machines Corp. (NYSE: IBM) remains stuck in the mud. Despite the growth of cloud, artificial intelligence and blockchain, IBM’s core IT-services operation remains the lion’s share of the operation, and it is keeping its growth elsewhere from seeming impressive. IBM’s shares were down 8% so far in 2017. Trading at $153.50, it has a consensus target price of $163.74.

3. Pfizer
> Yield: 3.76%

Pfizer Inc. (NYSE: PFE) has underperformed the Dow, with a gain of 11% so far in 2017. It faces drug price pressures as a continued potential risk. The share price of $36.10 compares with the consensus target price of $38.29.

4. Exxon Mobil
> Yield: 3.67%

Exxon Mobil Corp. (NYSE: XOM) may remain the largest oil and gas giant of them all, but its shares were still down 7% so far in 2017. Perhaps it can find its mojo in 2018 with a higher floor on oil prices, and perhaps its large natural gas operations can finally pay off. Trading at $84.00, Exxon Mobil now has a consensus target of $86.50.

5. Chevron
> Yield: 3.43%

Chevron Corp. (NYSE: CVX) did better in 2017 than rival Exxon, with a gain of more than 6% with a few days before year’s end. That being said, it is still way short of the Dow’s gains. The share price of $125.25 compares with the $128.55 consensus target.

6. Merck
> Yield: 3.41%

Merck & Co. Inc. (NYSE: MRK) was last seen down more than 4% so far in 2017, and it faces the same price-pressure risk as rival Pfizer ahead. Shares were trading at $56.45. The consensus analyst target is $65.23.

7. Coca-Cola
> Yield: 3.25%

Coca-Cola Co. (NYSE: KO) finally has generated close a 10% annual gain, but that still is less than half of the Dow as a benchmark. The company keeps managing to diversify away from sparkling sugar sodas, and that may continue to help ahead. Coca-Cola has a consensus analyst price target of $49.06. It was trading at $45.72.

8. Cisco
> Yield: 3.01%

Cisco Systems Inc. (NASDAQ: CSCO) is the only one of the preliminary Dogs of the Dow for 2018 that has managed to outperform the Dow, with its 27.5% total return. Cisco should be a winner under tax reform and has billions of overseas dollars that it can repatriate back to the United States. Its $38.60 share price compares to a consensus price target of $38.92.

9. Procter & Gamble
> Yield: 3.00%

Procter & Gamble Co. (NYSE: PG) was last seen up 9.5% so far in 2017, and activist investor Nelson Peltz has now been named to its board of directors. The company has raised its dividend for 61 consecutive years, and with shares at $92.60, it has a consensus target price of $93.53.

10. General Electric
> Yield: 2.74%

General Electric Co. (NYSE: GE) has had a pathetic 44% drop so far in 2017, and the departure of Jeff Immelt did not keep it from falling lower. It is debatable whether GE should even be allowed in the Dogs of the Dow now that it slashed its dividend in half. Shares were last seen at $17.55, and the consensus price target is still up at $21.99. That GE’s consensus analyst target was up at $28.50 just 90 days ago should spell out how painful owning GE has been.

11. Johnson & Johnson
> Yield: 2.40%

Johnson & Johnson (NYSE: JNJ) has now raised its dividend payment for 55 straight years. The shares were last seen up almost 22% so far in 2017, which is more impressive than all but Cisco’s performance against rival Dow Dogs. The consensus analyst target is $146.82, and shares traded near $140.00.

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