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.
“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:
- Watch Hickey's Latest Appearance on CNBC (Dec. 8, 2009)
More Market Intelligence:
- 7 Stocks For 2010's Strong Market: Strategist
- Cramer: 10 Stocks to Buy Your Kids in 2010
- How to Pick Stocks by Following Bonds: Portfolio Manager
CNBC Data Pages:
No immediate information was available for Hickey or his firm.