The table below outlines the performance of the top five of the Canadian Dividend Watch list for September 2018.
The orange circles indicate where, among the top five, the performance was improved if the top 2nd, 3rd and 4th stocks were selected instead of buying the top five.
A very important observation is taking the performance of the top five low yield stocks and the top five high yield stocks. According to the Dogs of the Dow investment strategy, selecting the top ten stocks with the highest yield will result in higher performance than the representative index. In this case, the Toronto Stock Exchange is the index we compare the performance to.
In the case of the high yield stocks, they generated returns of –16.23% while the low yield stocks generated returns of +16.35%. The chasm in performance between the two is wide, deep, and consistent on a historical basis.
We are confident that if you are an investor seeking average returns then you will not find it in the group of the highest yielding stocks. In addition, low yielding stocks are able, on a consistent basis, to provided competitive returns year in and year out, as confirmed in our work of the same stocks in the Dow Jones Industrial Average since 1996.