One of the best year-end investment strategies is the Dogs of the Dow. Granted, some analysts say it's an antiquated strategy with low success rates. But history proves they still have plenty of bite.
In fact, having traded the Dogs of the Dow since 2016, I can tell you it's still a solid strategy with dividend payouts to boot.
For those of you who are new to the Dogs, it's one of the easiest – and oftentimes most profitable strategies. You simply buy a basket of underperformers on the Dow that pay dividends, and sell by the end of the year. In most years, the Dogs do pretty well.
What makes the strategy attractive is that you're buying the highest-yielding stocks on the Dow, which itself is made up of large, established, and financially stable companies. This selection process filters for reliability and lowers the risk of investing in a speculative venture. All you’re really doing is investing in temporarily beaten-down respected companies and collecting yield until the stock decides to rally back.
For those who are new to the Dogs of the Dow, it really is that easy.
A Proven Track Record
Let's look at how the Dogs have done historically since 2016.
The 2024 Dogs of the Dow underperformed the major indices in 2024. However, with dividends, investors still did well for the year.
The 2023 Dogs of the Dow returned an average of 10.1%, which came in below the 14.4% return on the Dow Jones Industrials. Still, with the appreciation in most of the 2023 Dogs coupled with dividends, investors still did well overall. The 2022 Dogs of the Dow beat the major indices, even in a rough year.
In fact, while the Dogs of the Dow stocks fell 1.6% on the year, once you add in the dividend payouts, the Dogs returned 2% on the year. And while 2% may not sound like a big win, consider that, in 2022, one of the worst years on record since 2008, the NASDAQ lost 33%. The S&P 500 lost 19%. The Dow Jones lost about 9%.
In 2021, the Dogs of the Dow returned about 16.3%. While 2020 wasn't a great year for the Dogs, most other years have done very well. In 2019, the Dogs were up 20%. In 2018, they were up about 1%, but still beat the Dow, which fell close to 6%. In 2017, the dogs were up 19%. In 2016, they were up 16%.
How Are the Dogs of the Dow Doing in 2025?
For 2025, here's how the Dogs are doing.
- Verizon (VZ), which yields 6.68%, started the year at around $38. It's. now up to $41.35.
- Chevron (CVX), which yields 4.51%, ran from about $142 to $151 so far.
- Johnson & Johnson (JNJ), which yields 2.57%, ran from $142 to $202.50.
- Amgen (AMGN), which yields 2.78%, ran from about $258 to $342.
- Merck (MRK), which yields 3.57%, slipped from about $98 to $95.
- Coca-Cola (KO), which yields 2.86%, jumped from $61 to $71.35.
- IBM (IBM), which yields 2.31%, ran from about $215 to a high of $291.
- Cisco (CSCO), which yields 2.09%, ran from about $58 to $78.
- McDonald's (MCD), which yields 2.44%, ran from about $293 to $304.
- Procter & Gamble (PG), which yields 2.87%, fell from about $264 to $147.
Eight out of 10 isn't bad at all.
Conclusion
Not only do investors make a substantial amount of money year to date from the Dogs of the Dow stocks, but they also earn a good return on the dividends. Also, while the 2026 Dogs of the Dow list hasn’t been released yet, stay tuned. We’ll share that list with you once it’s officially out.
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