4 Top Dogs of the Dow Jones With Highest Earnings Growth Forecats

by Dividend Yield
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Submitted by Dividend Yield as part of our contributors program.

As you might know, I also cover some popular indices and investing strategies and present great picks from the selection.

One investment strategy that I cover and would like to update today is the Dogs of the Dow Jones investing rule. The popular investment theory was introduced by Michael O’Higgins in 1991 and became very popular over the time.

The philosophy behind is to buy ten stocks of the Dow Jones with the highest dividend yield and lowest price to earnings ratio at the beginning of the year and to hold these stocks for a year. After this period, the investor should sell stocks that are no more Dogs of the Dow and buy therefore new Dogs of the Dow. Below is an updated sheet of the ten best Dogs of the Dow. They have the lowest expected price to earnings ratio and highest dividend yield within the Dow Jones index.

Summarized, the 10 cheapest stocks of the Dow Jones have an average dividend yield of 3.56 percent as well as a forward P/E ratio of 24.62. The average P/B ratio amounts to 2.65 and P/S ratio is 2.46.


Here are the Dogs with the highest EPS growth forecasts:

Intel (INTC) has a market capitalization of $110.97 billion. The company employs 106,000 people, generates revenue of $53,341.00 million and has a net income of $11,005.00 million. Intel’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $22,160.00 million. The EBITDA margin is 41.54 percent (the operating margin is 27.44 percent and the net profit margin 20.63 percent).

Financial Analysis: The total debt represents 15.94 percent of Intel’s assets and the total debt in relation to the equity amounts to 26.26 percent. Due to the financial situation, a return on equity of 22.66 percent was realized by Intel. Twelve trailing months earnings per share reached a value of $1.85. Last fiscal year, Intel paid $0.87 in the form of dividends to shareholders. The 5-Year earnings are expected to grow by 11 percent.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 12.04, the P/S ratio is 2.08 and the P/B ratio is finally 2.15. The dividend yield amounts to 4.04 percent and the beta ratio has a value of 1.02.

Verizon Communications (VZ) has a market capitalization of $134.33 billion. The company employs 180,900 people, generates revenue of $115,846.00 million and has a net income of $10,557.00 million. Verizon Communications’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $37,190.00 million. The EBITDA margin is 32.10 percent (the operating margin is 11.36 percent and the net profit margin 9.11 percent).

Financial Analysis: The total debt represents 23.08 percent of Verizon Communications’s assets and the total debt in relation to the equity amounts to 156.79 percent. Due to the financial situation, a return on equity of 2.53 percent was realized by Verizon Communications. Twelve trailing months earnings per share reached a value of $0.54. Last fiscal year, Verizon Communications paid $2.03 in the form of dividends to shareholders. The 5-Year earnings are expected to grow by 10.46 percent.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 86.78, the P/S ratio is 1.16 and the P/B ratio is finally 4.05. The dividend yield amounts to 4.39 percent and the beta ratio has a value of 0.42.

General Electric (GE) has a market capitalization of $240.44 billion. The company employs 305,000 people, generates revenue of $147,359.00 million and has a net income of $14,902.00 million. General Electric’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $29,339.00 million. The EBITDA margin is 19.91 percent (the operating margin is 11.81 percent and the net profit margin 10.11 percent).

Financial Analysis: The total debt represents 60.42 percent of General Electric’s assets and the total debt in relation to the equity amounts to 336.56 percent. Due to the financial situation, a return on equity of 12.24 percent was realized by General Electric. Twelve trailing months earnings per share reached a value of $1.40. Last fiscal year, General Electric paid $0.70 in the form of dividends to shareholders. The 5-Year earnings are expected to grow by 9.80 percent.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 16.82, the P/S ratio is 1.63 and the P/B ratio is finally 2.00. The dividend yield amounts to 3.22 percent and the beta ratio has a value of 1.68.

Cisco Systems (CSCO) has a market capitalization of $127.06 billion. The company employs 66,639 people, generates revenue of $48,607.00 million and has a net income of $9,983.00 million. Cisco Systems’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $13,652.00 million. The EBITDA margin is 28.09 percent (the operating margin is 23.03 percent and the net profit margin 20.54 percent).

Financial Analysis: The total debt represents 16.02 percent of Cisco Systems’s assets and the total debt in relation to the equity amounts to 27.42 percent. Due to the financial situation, a return on equity of 18.08 percent was realized by Cisco Systems. Twelve trailing months earnings per share reached a value of $1.86. Last fiscal year, Cisco Systems paid $0.62 in the form of dividends to shareholders. The 5-Year earnings are expected to grow by 9.10 percent.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 12.81, the P/S ratio is 2.62 and the P/B ratio is finally 2.15. The dividend yield amounts to 2.85 percent and the beta ratio has a value of 1.22.

Take a closer look at the full list of the Dogs of the Dow Jones Index. The 10 cheapest stocks of the Dow Jones have an average dividend yield of 3.56 percent as well as a forward P/E ratio of 24.62. The average P/B ratio amounts to 2.65 and P/S ratio is 2.46.

 

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