Out Fox The $treet

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The goal of the series is to highlight that the old theory of buying the Dow stocks with the highest dividend yields is outdated.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. Read the full article on Seeking Alpha.  Disclosure: Long AAPL, CAT, IBM, TRV. Please read the disclaimer page for more details.

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The goal of the series is to highlight that the old theory of buying the Dow stocks with the highest dividend yields is outdated.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....

Summary The New Dogs of the Dow had Q2 returns that exceeded the gains of the DJIA, but it failed to match the rebound of the Dogs of Dow theory. The average stock in the Net Payout Yields based list has a yield of 8.3% starting Q3. After a large loss in Q2, Travelers tops the list with a 12.3% 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The goal of the series is to highlight that the old theory of buying the Dow stocks with the highest dividend yields is outdated.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, T...

Investors continue to focus on dividends as the best and in some minds the only way to return capital to shareholders. That remains a big mistake as the population of stocks with a high dividend payout ratio, not to mention ones that even pay dividends has been shrinking just about every decade. Several key factors have influenced these decisions. First, the historical tax disadvantage of dividends versus long term capital gains has worked to weaken the focus on dividends. Second, the SEC instituting rule 10b-18 back in 1982 made it easier for firms to implement buybacks without stock manipulation charges. Third, market participants place such a great emphasis on maintaining steadily increasing dividends that corporate boards prefer the flexibility of buyback programs over the negativity of reducing a dividend. Read the full article on Seeking Alpha. Disclosure: Long COP, GPS, KSS, TRV. Please review the disclaimer page for more details.