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Dogs Of The Dow Were Well Behaved In April

May 29, 2015 1:37 PM ETMCD, PFE, GE, CAT1 Comment
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Summary

  • The Dow Jones Industrial Average has alternated winning months with losing ones so far in 2015.
  • Only two of the Dogs, McDonald’s and Pfizer saw their share prices decline in April.
  • Overall, a Dogs of the Dow strategy is likely to appeal to some investors, particularly conservative, income-oriented accounts.

By Robert M. Greene

The Dogs of the Dow were well behaved in April. In fact, relative to the rest of the Industrial Average, they had their best month of the year. This group, which is made up of the 10 highest yielding Dow stocks as of the start of 2015, outperformed the non-Dogs by more than 300 basis points. In all, the Dogs increased 3.5% for April, while the other 20 stocks in the blue chip index inched ahead just 0.2%. (Note that these results are based on an equal weighting of each of the Dow components. Moreover, although Apple (AAPL) has replaced AT&T (T) in the DJIA, all results and comparisons for this year include only the original 30 components.)

Overall, the Dow Jones Industrial Average has alternated winning months with losing ones so far in 2015. The Dogs have followed this pattern, as well, with the April advance putting the group back in the black and ahead for the year. In all, the Dogs were up 1.9% after four months, while the non-Dogs were still showing a slight loss of 0.3%.

Leading the Way

Among the Dogs, the April gains were fairly broadly based. Eight of the ten issues showed an increase in share price, though the gain at beverage giant Coca-Cola (KO) amounted to all of a penny. General Electric (GE) was the top-performing pup, as its share price climbed 9.1% in April. The advance was sparked by news that the company plans to sell off most of its financial businesses and focus on its diverse portfolio of industrial operations.

The funds generated by these actions would help to support efforts to return about $90 billion in capital to shareholders by 2018. The subsequent release of March-quarter results, on the other hand, failed to get a rise out of investors. Foreign-currency

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Related Stocks

SymbolLast Price% Chg
MCD--
McDonald's Corporation
PFE--
Pfizer Inc.
GE--
General Electric Company
CAT--
Caterpillar Inc.

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