Below is a chart of the performance of the Dogs of the Dow from December 31, 2018 to December 31, 2019.
In 2019, the Dogs of the Dow (high yield) failed to exceed the performance of the Dow Jones Industrial Average. In addition, the Dogs of the Dow (high yield) severely underperformed the low yield stocks by a margin of +15%.
Our commentary from the January 2019 Dogs of the Dow watch list had the following to say:
“Our preference is for stocks in the highest p/e or lowest yield stocks.”
While the top 3 stocks in the high p/e category underperformed the Dow Jones Industrial Average with a gain of +13.54%, the low yield group crushed the index with gains of +36.71% and +32.36%.
1996-2019 Long-Term Performance
Below is our long-term performance of the Dogs of the Dow from 1996 to 2019 for both the top ten and top 3 stocks for the respective categories.
As is the case, the Dogs of the Dow (high yield) underperform the DJIA and the low yield category. High P/E stocks seem to win the day with above average gains on a long term basis. This is counter to the belief that investors should buy low p/e stocks.
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