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 As we've done for five years running, we're once again ready to announce the Dogs of the Dow for the year 2010. After experiencing a losing year in 2007, and taking a pounding in 2008 (a loss of almost 42%), the Dogs bounced back in 2009. If you were following the rebound of the stock market last year, it's not surprising the Dogs made positive gains.
Dogs of the Dow Performance
The Dogs of the Dow ended 2009 with a double-digit gain for the year. That's the best performance in the last three years. Unfortunately, the "Dogs" once again under-performed the stock market when compared to broader measures such as the S&P 500 and the Dow Jones Industrial Average.
In 2009, the S&P 500 finished the year with a 23.4% gain, while the DJIA closed out the year with a gain of 18.8%, the Dogs averaged only 12.9%. That means the Dogs of the Dow Theory did not meet its objective again last year, since it failed to beat these two market performance measures. Overall, the Dogs of the Dow Theory has proved itself a winning investment strategy only once in the last five years - a very disappointing outcome for this investing approach. The last time the theory held true was back in 2006.
Some of the bigger Dogs in 2009 included General Electric, Verizon, and AT&T - three companies that failed to break even on the year. This is a surprising result for blue chip stocks, especially during a comeback year following the end of the Great Recession.
2010 Dogs of the Dow
It's only possible to announce the 2010 Dogs of the Dow after the last trading day of any given year. Fortunately, the criteria for choosing these new Dogs are simple:
The 2010 Dogs can be found in the following table:
Dogs of the Dow List - 2010
| Stock Symbol |
Company Name |
2009 Close |
Dividend Yield |
| T |
AT&T Inc. |
28.13 |
5.93% |
| VZ |
Verizon Communications Inc. |
33.17 |
5.68% |
| DD |
DuPont de Nemours |
33.78 |
4.84% |
| KFT |
Kraft Foods Inc. |
27.26 |
4.23% |
| MRK |
Merck & Co. Inc. |
36.57 |
4.10% |
| PFE |
Pfizer Inc. |
18.25 |
3.88% |
| CVX |
Chevron Corp. |
77.11 |
3.52% |
| MCD |
McDonald's Corp. |
62.63 |
3.46% |
| HD |
Home Depot Inc. |
28.94 |
3.08% |
| BA |
Boeing Co. |
54.19 |
3.04% |
If you look back at the 2009 Dogs of the Dow, then you'll notice half the dogs were replaced in 2010. Bank of America and Citigroup are no longer included in the DJIA. Alcoa, General Electric and J.P. Morgan Chase moved off the list this year. New additions include Boeing, Chevron, Home Depot, Kraft Foods and McDonalds.
Dow Theories
This particular Dow Theory was first popularized by Michael O'Higgins in his book Beating the Dow, published back in 1992. If you're interested in learning more about the assumptions behind this investing strategy, then you might want to read our complete article on Dogs of the Dow. That article explains all of the history behind this approach, including how you are supposed to invest in each of these stocks. It also contains the list of Dogs of the Dow for prior years, as well as the annual performance of the Dogs over the last several years.
About the Author - Dogs of the Dow 2010
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