The 8 ‘Dogs Of The Dow’ Selections For 2018

(Photographer: Michael Nagle/Bloomberg)

Disclosure: I have no positions in Chevron, IBM, Coca Cola, Merck, Procter & Gamble, Verizon, Pfizer, ExxonMobil or any other stock mentioned in this article.

The Dow Jones Industrial Average ended 2017 up 25.1% for the year, lagging its all-time intraday high of 24,876.07 set on Dec. 18. The eight Dogs of the Dow for 2017 had an aggregate gain of a solid 16.1% for the year.

Boeing (BA) must be removed from the dogs as it was the best performing Dow component for the year with a gain of 89.4%. Its dividend yield fell to just 2.31%, so if you bought this stock a year ago as a dog, book the huge gain now.

Cisco Systems (CSCO) is removed despite a favorable dividend yield of 3.24%, as it had a bull market year with a gain of 26.7%. Book this huge dog gain now.

The new Dogs of the Dow for 2018 will have two new members. Merck (MRK) declined by 4.4% in 2017 and joins with a dividend yield of 3.41%. Proctor & Gamble (PG) joins despite a gain of 9.3% in 2017 as its dividend yield is 3.05%.

I could have selected General Electric (GE) as it was the Dows biggest loser, falling 44.8% for the year. The issue for me is that its dividend cut reduced its dividend yield to just 2.76%. I do not include a stock as a Dog of the Dow unless its dividend yield exceeds 3%.

Making these changes to the dogs for 2018, these eight stocks had an aggregate gain of just 1.7% in 2017.

The Year-To-Date Scorecard For The Eight Dogs Of The Dow For 2018

Global Market Consultants

Dogs Of The Dow For 2018

Chevron (CVX) ended 2016 with a dividend yield of 3.67% and ended 2017 at 3.45%, a rank of 5.

Courtesy of MetaStock Xenith

Courtesy of MetaStock Xenith

The weekly chart for Chevron is positive with the stock above its five-week modified moving average of $120.28 and above its 200-week simple moving average of $106.65, which is the reversion to the mean, last tested during the week of Aug. 25 when the average was $107.13. The 12x3x3 weekly slow stochastic reading ended 2017 rising to 79.64 and will be above the overbought threshold at the end of this week.

Investment Strategy: Buy weakness to my monthly and semiannual value levels of $121.61 and $98.73, respectively, and reduce holdings on strength to my quarterly and annual risky levels of $132.36 and $145.44, respectively.

International Business Machines (IBM) ended 2016 with a dividend yield of 3.55% and ended 2017 at 4.11%, a rank of 2.

Courtesy of MetaStock Xenith

Courtesy of MetaStock Xenith

Must Read: 12 Stocks To Buy To Keep The Gains Going In 2018

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