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3 Dogs of the Dow Jones with the Highest Earnings Growth Forecasts
Posted by: Dividend (IP Logged)
Date: September 27, 2013 09:22AM

The Dogs of the Dow Jones Strategy is a popular investment rule or strategy which is used by many investors. The success rate is controversial. Some studies say that you can outperform by following this rule; others say you can't benefit from it.

The philosophy behind it is to buy 10 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 longer Dogs of the Dow and then buy new Dogs of the Dow.

Below is an updated sheet of the 10 best Dogs of the Dow. They have the lowest expected price to earnings ratio and highest dividend yield within the Dow Jones index.

Today you can find a full list of the cheapest stocks from the Dow Jones, also named as Dogs of the Dow Jones in the attached list.

In summary, the 10 cheapest stocks of the Dow Jones have an average dividend yield of 3.53 percent as well as a forward P/E ratio of 12.20. The average P/B ratio amounts to 2.67 and P/S ratio is 2.48.

Here are the Dogs with the highest expected earnings growth:

General Electric (
GE) has a market capitalization of $246.96 billion. The company employs 305,000 people, generates revenue of $147.359 billion and has a net income of $14.902 billion. General Electric’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $29.339 billion. 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. Earnings of GE are expected to grow by 9.8 percent for the upcoming five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.28, the P/S ratio is 1.67 and the P/B ratio is finally 2.05. The dividend yield amounts to 3.14 percent and the beta ratio has a value of 1.72.

Verizon Communications (VZ) has a market capitalization of $136.41 billion. The company employs 180,900 people, generates revenue of $115.846 billion and has a net income of $10.557 billion. Verizon Communications’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $37.466 billion. The EBITDA margin is 32.34 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 $2.02 in the form of dividends to shareholders. Earnings of VZ are expected to grow by 9.36 percent for the upcoming five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 88.13, the P/S ratio is 1.16 and the P/B ratio is finally 4.05. The dividend yield amounts to 4.52 percent and the beta ratio has a value of 0.38.

Cisco Systems (CSCO) has a market capitalization of $128.10 billion. The company employs 66,639 people, generates revenue of $48.607 billion and has a net income of $9.983 billion. Cisco Systems’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $13.652 billion. The EBITDA margin is 28.09 percent (the operating margin is 22.97 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 $0.53 in the form of dividends to shareholders. Earnings of CSCO are expected to grow by 9.10 percent for the upcoming five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 12.78, the P/S ratio is 2.69 and the P/B ratio is finally 2.23. The dividend yield amounts to 2.78 percent and the beta ratio has a value of 1.26.

Take a closer look at the full list of the 10 cheapest stocks of the Dow Jones. In average they have a dividend yield of 3.53 percent as well as a forward P/E ratio of 12.20. The average P/B ratio amounts to 2.67 and P/S ratio is 2.48.

Related Stock Ticker Symbols:

T, VZ, INTC, MRK, PFE, GE, DD, JPM, CSCO, MSFT

Selected Articles:

· Cheapest Dividend Paying Large Caps As of September 2013

· Twelve Stocks With Very High Dividends Together With Low Expected P/E’s

· 13 Cheap Stocks With Dividend Yields Over 3% And A Predictable Business

· 18 Undervalued Stocks With Good Dividends And A Predictable Business

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Stocks Discussed: T, VZ, INTC, MRK, PFE, GE, DD, JPM, CSCO, MSFT,
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