IB Net Payout Yields Model

The New Dogs Of The Dow - Q3 2015

  • The New Dogs of the Dow had substantial Q3 losses similar to the benchmark Dow.
  • The average stock in the Net Payout Yields based list has a yield of 9.1% to start Q4.
  • Even after a small gain in Q3, Travelers continues to top the list with a 12.1% yield.

This article will focus on the quarterly returns and changes in the new "Dogs of the Dow" strategy originally introduced (see The New Dogs Of The Dow - 2015) back in January. The goal of the series is to highlight that the old theory of buying the Dow stocks with the highest dividend yields is outdated. The more modern version involves using the Net Payout Yield (NPY) that adds the net stock buyback yield to the dividend yield. This yield more accurately reflects the modern corporate structure that utilizes a large amount of stock buybacks.

Read the full article on Seeking Alpha.

Disclosure: Long AAPL, CAT, IBM, TRV. Please review the disclosure page for more details. 


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