Dogs of the Dow 2016

It wasn't a stellar year for the Dow Jones Industrial Average; it was a year of slightly negative gains for investors in the stock market.  As we've done for the past ten years, the close of one year signals the time to announce the Dogs of the Dow for 2016.

Dogs of the Dow Performance

After experiencing positive gains for the last six years, the Dogs of the Dow ended 2015 with a single-digit loss.  They outperformed the Dow Jones Industrial Average (DJIA); albeit by a very slim margin.  Unfortunately, the dogs failed to beat the S&P 500 Index over the last five years; thereby failing to meet the objective of this investment approach.

In 2015, the S&P 500 finished the year with a 0.9% loss, the DJIA closed out the year with a loss of 2.2%, while the Dogs were down roughly 1.2%.  Overall, the Dogs of the Dow Theory proved to be a winning investment strategy only three times in the last ten years (2006, 2010, and 2011).

Some of the bigger Dogs in 2015 include Caterpillar (-25.8%), Chevron (- 19.8%), and ExxonMobil (- 15.7%), which are poor results for blue chip stocks; especially in what was a relatively flat year for the Dow Jones Industrial Average.

2016 Dogs of the Dow

Dogs of the Dow TrendIt's only possible to announce the Dogs of the Dow after the last trading day of any given year.  Fortunately, the criteria for choosing these new Dogs are simple:

The companies that make up the 2016 Dogs of the Dow can be found in the following table:

Dogs of the Dow 2016

Stock Symbol Company Name 2015 Close Dividend Yield
VZ Verizon 46.22 4.89%
CVX Chevron 89.96 4.76%
CAT Caterpillar 67.96 4.53%
IBM International Business Machines 137.62 3.78%
XOM ExxonMobil 77.95 3.75%
PFE Pfizer 32.28 3.72%
MRK Merck 52.82 3.48%
PG Procter & Gamble 79.41 3.34%
WMT Wal-Mart 61.3 3.20%
CSCO Cisco Systems 27.16 3.09%

Four companies were replaced this year.  AT&T, McDonald's, General Electric and Coca Cola were part of the 2015 list, while IBM, Procter & Gamble, Wal-Mart, and Cisco Systems are new in 2016.

Dow Theories

The Dogs of the Dow Theory was first popularized by Michael O'Higgins in his book Beating the Dow, published back in 1992.  Anyone interested in learning more about the assumptions behind this investing strategy, should read our complete article on Dogs of the Dow.  That article explains more of the history behind this approach, including the steps to follow when investing in each of these companies.  It also contains a list of the Dogs of the Dow for the last five years, as well as their historical performance over a fifteen year timeframe.

About the Author - Dogs of the Dow 2016 - Copyright © 2016 (Last Reviewed on January 2, 2016)