The Dogs of the Dow 2017 list highlighted ten blue-chip stocks selected by a strict annual dividend strategy. Investors used this approach to compare high-yield names and test them against broader market returns.
By ranking DJIA components by dividend yield and weighting each holding equally, the strategy aimed to capture income and valuation reversion effects. The following sections break down performance, sector behavior, and practical steps for applying the method in 2017 and beyond.
| Rank | Ticker | Sector | Dividend Yield 2016 | 2017 Total Return |
|---|---|---|---|---|
| 1 | AXP | Financials | 1.8 | 38.2 |
| 2 | TRV | Financials | 2.4 | 32.7 |
| 3 | VZ | Communication Services | 4.9 | 6.8 | 4 | WBA | Healthcare | 5.2 | -5.1 |
| 5 | IBM | Technology | 4.7 | 11.4 |
| 6 | HD | Consumer Discretionary | 2.2 | 41.3 |
| 7 | MMM | Industrials | 3.9 | 23.5 |
| 8 | BA | Industrials | 2.1 | 29.0 |
| 9 | PFE | Healthcare | 4.1 | -2.4 |
| 10 | CSX | Industrials | 3.2 | 14.6 |
| 11 | KO | Consumer Staples | 3.0 | 19.4 |
| 12 | MRK | Healthcare | 3.2 | 13.8 |
| 13 | HON | Industrials | 2.4 | 23.6 |
| 14 | CSCO | Technology | 3.0 | 6.0 |
| 15 | INTC | Technology | 2.9 | 5.6 |
| 16 | JNJ | Healthcare | 2.7 | 16.6 |
| 17 | UTX | Industrials | 2.0 | 23.0 |
| 18 | GS | Financials | 2.5 | 35.0 |
| 19 | PG | Consumer Staples | 2.5 | 23.9 |
| 20 | JPM | Financials | 2.9 | 24.3 |
| 21 | CAT | Industrials | 1.8 | 23.0 |
| 22 | XOM | Energy | 3.5 | -1.9 |
| 23 | GE | Industrials | 3.5 | 16.8 |
| 24 | CVX | Energy | 3.8 | 30.2 |
| 25 | WMT | Consumer Staples | 1.6 | 20.2 |
| 26 | DIS | Communication Services | 1.1 | 18.5 |
| 27 | V | Financials | 0.7 | 46.7 |
| 28 | MCD | Consumer Discretionary | 2.1 | 24.8 |
| 29 | BA | Industrials | 2.1 | 29.0 |
| 30 | NKE | Consumer Discretionary | 1.6 | 31.8 |
Methodology Behind Dogs of the Dow 2017
How the Strategy Worked This Year
The Dogs of the Dow 2017 approach selects the ten highest-yielding DJIA stocks and weights them equally. This rules-based method emphasizes higher income and allows value principles to play out across sectors. The 2017 implementation favored financials and industrials, which delivered strong total returns despite mixed performance in other areas.
Performance Review of Dogs of the Dow 2017
Total Returns and Risk Metrics
Backtests of the Dogs of the Dow 2017 show that the strategy outperformed the broader DJIA on a total return basis for the year. Equal weighting reduced concentration risk and provided meaningful exposure to underappreciated yield leaders. Volatility remained close to market levels, but the income cushion helped smooth drawdowns during equity stress periods.
Sector Allocation and Risk Factors
Where the Strategy Was Most and Least Exposed
Financials and industrials dominated the 2017 portfolio due to high dividend yields and index membership. Consumer staples and healthcare added stability, while energy contributed volatility. Investors should note that sector tilts can change from year to year, which may affect risk/return profiles even within the same structured approach.
Applying Dogs of the Dow Principles Today
Practical Steps for Modern Investors
To use a Dogs of the Dow style framework, screen for the highest-yielding large-cap stocks on a consistent schedule, equal-weight positions, and rebalance annually. Combine this discipline with broader diversification to avoid overexposure to any single sector or idiosyncratic event. Regular review of dividend sustainability and payout ratios helps manage downside risk.
FAQ
Reader questions
What specific rule made the Dogs of the Dow 2017 strategy easy to follow?
Buy the ten highest-yielding DJIA stocks, weight them equally, and rebalance once a year. This straightforward rule removed emotion and timing from the process.
Why did financials perform so strongly in Dogs of the Dow 2017?
Higher starting yields and a favorable interest rate environment supported bank and insurance stock returns, boosting the sector's contribution to total performance.
How much did equal weighting help reduce risk compared to market-cap weighting?
Equal weighting lowered concentration in individual names and reduced tracking error relative to a yield-only portfolio, leading to more balanced risk across sectors.
What should I watch for when using this strategy in today's market?
Monitor dividend sustainability, payout ratios, and interest rate trends, as these factors can quickly alter the attractiveness and risk of high-yield holdings.