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Dogs of the Dow Look Better in 2010: Stock Strategist

Wednesday, 16 Dec 2009 | 12:34 PM ET

2009's Dogs of the Dow—the top 10 Dow stocks whose dividend is the highest fraction of their price—failed to beat the market this year. So will the same be true in 2010? Paul Hickey, co-founder of Bespoke Investment Group, shared his view.

Dogs of the Dow
The 10 Dow stocks with the highest dividend yields failed to beat the market in 2009, but will the same be true in 2010? Paul Hickey, of the Bespoke Investment Group, shares his insight.

“For the last 3 years, [the Dogs list] has been dead: it’s underperformed each of the last 3 years and cumulatively, it’s down 28 percent—whereas the Dow is only down 8 percent over the last 3 years,” Hickey told CNBC.

However, looking ahead to the new list of companies going into 2010, Hickey said there are some encouraging signs.

“The names being added as of today are Home Depot, Intel, Chevron and McDonald’s…Most of these stocks are up or flat over the year and they’ve been raising their dividends,” he explained.

“In the prior years, the companies that have made up the Dogs of the Dow have been financial companies and other companies that have been saddled with debt.”

Hickey said the 2010 Dogs of the Dow have an average dividend yield of 4.3 percent and don't have as much debt as the companies in the past.

“So these companies aren’t going to be as reliant on the capital markets to fund their operations going forward,” he said.

2010 Dogs of the Dow:

Pfizer

DuPont

AT&T

Verizon

Merck

Kraft Foods

Home Depot

Intel

Chevron

McDonald’s

  • Watch Hickey's Latest Appearance on CNBC (Dec. 8, 2009)

More Market Intelligence:

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Disclosures:

No immediate information was available for Hickey or his firm.

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Disclaimer

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