Dogs of the Dow

The Dogs of the Dow is an investment strategy popularized by Michael B. O'Higgins in a 1991 book and his Dogs of the Dow website.^[1]

The strategy proposes that an investor annually select for investment the ten stocks listed on the Dow Jones Industrial Average whose dividend is the highest fraction of their price, i.e. stocks with the highest dividend yield. Under other analysis these stocks could be considered "dogs", or undesirable, as companies often raise their dividend in response to bad news or a decline in share price. But the Dogs of the Dow strategy proposes these same stocks have the potential for substantial increases in stock price plus relatively high dividend payouts.^[2]

Independent research has produced conflicting results. Some studies find mixed or negative results for the method, but application of the method to international markets confirmed the Dogs of the Dow method may offer superior long-term results.