The New Dogs Of The Dow - Q2 2016
The New Dogs of the Dow had a solid Q1 gain that surpassed the benchmark Dow.
The average stock in the Net Payout Yields based list had a yield of 9.2% to start Q2.
Due to a large buyback, United Technologies overtook the lead with the highest yield at 13.1%.
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) last 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The goal of the series is to highlight that the old theory of buying the Dow stocks with the highest dividend yields is outdated.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.
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Disclosure: Long AAPL, CAT, IBM, TRV. Please read the disclaimer page for more details.