Dogs Of The Dow: August 2013
Dividend Yield | Aug 27, 2013 04:08AM ET
One investment strategy that I cover and would like to update today is the Dogs of the Dow Jones investing rule. The popular investment theory was introduced by Michael O’Higgins in 1991 and became very popular over the time.
The philosophy behind it is to buy ten stocks of the Dow Jones with the highest dividend yield and lowest price to earnings ratio at the beginning of the year and to hold these stocks for a year. After this period, the investor should sell stocks that are no more Dogs of the Dow and buy therefore new Dogs of the Dow. Below is an updated sheet of the ten best Dogs of the Dow. They have the lowest expected price to earnings ratio and highest dividend yield within the Dow Jones index.
These 10 cheapest stocks of the Dow Jones have an average dividend yield of 3.56 percent as well as a forward P/E ratio of 24.62. The average P/B ratio amounts to 2.65 and P/S ratio is 2.46.
Intel (INTC) has a market capitalization of $110.97 billion. The company employs 106,000 people, generates revenue of $53,341.00 million and has a net income of $11,005.00 million. Intel’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $22,160.00 million. The EBITDA margin is 41.54 percent (the operating margin is 27.44 percent and the net profit margin 20.63 percent).
Financial Analysis: The total debt represents 15.94 percent of Intel’s assets and the total debt in relation to the equity amounts to 26.26 percent. Due to the financial situation, a return on equity of 22.66 percent was realized by Intel. Twelve trailing months earnings per share reached a value of $1.85. Last fiscal year, Intel paid $0.87 in the form of dividends to shareholders. The 5-Year earnings are expected to grow by 11 percent.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 12.04, the P/S ratio is 2.08 and the P/B ratio is finally 2.15. The dividend yield amounts to 4.04 percent and the beta ratio has a value of 1.02.
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Here are the current Dogs of the Dow Jones
Related Stock Ticker Symbols:
T, INTC, VZ, MRK, DD, GE, CSCO, MSFT, JPM, PFE
Disclosure: I am long INTC, GE, CSCO. I receive no compensation to write about these specific stocks, sector or theme. I don't plan to increase or decrease positions or obligations within the next 72 hours.
For the other stocks: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.
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