Perhaps no year since World War II will be less missed than 2020. The coronavirus pandemic has claimed more than 1.7 million lives so far this year. In the United States, 18.5 million cases of COVID-19 have been identified and the death toll so far is approaching 327,000.
For investors, however, there have been some home runs and a lot of triples and doubles. Yet, there haven’t been a lot of singles, and that has weighed on returns for dividend investors.
One of the most popular strategies for dividend investing is known as the Dogs of the Dow. Investors buy shares in the 10 Dow stocks yielding highest dividends. Frequently these stocks have risen more than others because their shares were selling off or underperforming; hence, the term “dog.”
Using the SPDR Dow Jones Industrial Average ETF (NYSE: DIA) that adds dividends and share price appreciation to calculate a total return, the index has posted a return of 8.28% for the year to date, far below 2019’s total return of 25.03%.
In 2020, the range of dividend payments for the Dow 30 has been zero to 5.99%. Three stocks (Disney, Boeing and Salesforce) suspended dividends due to the impact of the coronavirus pandemic. Excluding these three stocks, the lowest dividend yield among the Dow 30 is currently 0.61% (Visa). The mean dividend among the 10 Dogs is 4.1%, and last year the 10 stocks posted a mean dividend payment of around 2.6%.
With just over a week to go in 2020, here’s a preliminary list of the Dogs of the Dow, based on a screen run after markets closed on December 21. We have rounded the dividend yield to the nearest tenth. One last note on the dogs: In August, the Dow dropped Exxon, Pfizer and Raytheon (formerly United Technologies) and added Salesforce.com, Amgen and Honeywell.
- Chevron Corp. (NYSE: CVX): 6.0%
- International Business Machines Corp. (NYSE: IBM): 5.3%
- Dow Inc. (NYSE: DOW): 5.1%
- Walgreens Boots Alliance Inc. (NASDAQ: WBA): 4.6%
- Verizon Communications Inc. (NYSE: VZ): 4.2%
- 3M Company (NYSE: MMM): 3.4%
- Merck & Co. Inc. (NYSE: MRK): 3.3%
- Cisco Systems Inc. (NASDAQ: CSCO): 3.2%
- Coca-Cola Co. Inc. (NYSE: KO): 3.1%
- Amgen Inc. (NASDAQ: AMGN): 3.1%
While it would take some major moves up by the runners-up, changes could occur if there are significant drops in the lowest yielding preliminary dogs. JPMorgan Chase currently yields 2.9%, and Intel’s yield also is 2.9%.
The #1 Thing to Do Before You Claim Social Security (Sponsor)
Choosing the right (or wrong) time to claim Social Security can dramatically change your retirement. So, before making one of the biggest decisions of your financial life, it’s a smart idea to get an extra set of eyes on your complete financial situation.
A financial advisor can help you decide the right Social Security option for you and your family. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.
Click here to match with up to 3 financial pros who would be excited to help you optimize your Social Security outcomes.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
