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 The Dow closed out the year with its first decline since 2002. The Dow ended the year at 10,717.50 or down 0.61% for the year. To remain in positive ground, the Dow needed to finish the year above the 10,785 mark. The S&P 500 stock index, on the other hand, gained 3.0% in 2005.
Dogs of the Dow in 2005
So we know that the Dow finished with a loss, while the S&P 500 finished up with a small gain in 2005. So the question remains - how did the Dogs of the Dow finish up in 2005 relative to these broader measures?
The short answer is simply this - not too good. In fact, the Dogs of the Dow finished up 2005 with a loss of 8.9%. Over the last five years, the Dog Theory hasn't been holding up too well. The Dogs have only beaten the S&P 500 in two of the last five years, while the Dogs have beaten the Dow in three of the last five years.
New Dogs of the Dow for 2006
Since the last trading day is over for the year, it's now possible to publish a new list of the Dogs of the Dow for 2006. Remember, the Dogs are simply those companies that are part of the Dow Jones Industrials that have the highest dividend yield on the last day of trading in any year. The new Dogs of the Dow can be found on the following table:
Dogs of the Dow 2006
| Stock Symbol |
Company Name |
2005 Close |
Dividend Yield |
| GM |
General Motors |
$19.42 |
10.5% |
| VZ |
Verizon Communications |
$30.12 |
5.4% |
| MRK |
Merck and Co. |
$31.81 |
4.7% |
| MO |
Altria Group |
$74.72 |
4.3% |
| PFE |
Pfizer Inc. |
$23.32 |
4.1% |
| C |
Citigroup |
$48.53 |
3.6% |
| JPM |
JP Morgan Chase |
$39.69 |
3.4% |
| DD |
DuPont |
$42.50 |
3.4% |
| KO |
Coca-Cola |
$40.31 |
2.8% |
| GE |
General Electric |
$35.05 |
2.8% |
If you're interested in more of the theory behind this investing strategy, then check out our complete article on Dogs of the Dow. That article explains exactly how you are supposed to invest in each of these stocks according to the theory first popularized by Michael O'Higgins in his book Beating the Dow, back in 1992.
About the Author - Dogs of the Dow 2006
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