In this article, we will take a look at some of the best dogs of the Dow stocks.
Research published in the International Journal of Trade, Economics and Finance points to the work of Michael O’Higgins and John Downes, authors of Beating the Dow, who laid out a simple but influential investment idea. They showed that an equally weighted basket made up of the 10 highest dividend-paying stocks in the Dow Jones Industrial Average often delivers better returns than the DJIA itself.
This approach became widely known as the “Dogs of the Dow” strategy, sometimes called Dow-10. The idea is straightforward and easy to follow. At the end of each calendar year, an investor selects the 10 Dow stocks with the highest dividend yields, invests equal amounts in each, and holds the portfolio for a full year. At the start of the next year, the portfolio is refreshed by replacing the holdings with the new set of the highest-yielding Dow stocks. This process is repeated annually as the makeup of the index and dividend yields change.
Earlier studies by O’Higgins and Downes, along with research by Jeremy Siegel, found that this dividend-focused portfolio tended to outperform the broader Dow in terms of total returns over time.
That said, the strategy has not worked as well in more recent years. Morningstar noted that the Dogs of the Dow have faced headwinds lately. Its analysis of the Elements Dogs of the Dow Fund, which followed the strategy from its launch in late 2007 until it closed in late 2022, shows that the fund largely matched the Dow’s performance through the late 2010s before falling well behind in the years that followed.
Given this, we will take a look at some of the best dogs of the Dow to invest in.
Our Methodology:
For this list, we screened 30 components of the Dow Jones Industrial Average and considered their dividend yields. From that list, we picked 12 stocks with the highest yields as of December 16. The stocks were then arranged according to their dividend yields.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
12. JPMorgan Chase & Co. (NYSE:JPM)
Dividend Yield as of December 16: 1.90%
JPMorgan Chase & Co. (NYSE:JPM) is among the best dogs of the Dow to invest in.
According to a report by the Wall Street Journal, JPMorgan Chase & Co. (NYSE:JPM) is stepping into a new corner of finance by bringing blockchain technology to a familiar product: the money-market fund. The bank’s $4 trillion asset-management business is launching its first tokenized money fund. Instead of traditional fund shares, investors will hold digital tokens that represent ownership in the fund.
JPMorgan Chase & Co. (NYSE:JPM) plans to seed the fund with $100 million of its own capital. The product is called the OnChain Net Yield Fund, or MONY. It is available only to qualified investors. That includes individuals with at least $5 million in investable assets and institutions with a minimum of $25 million. The minimum investment is set at $1 million.
John Donohue, head of global liquidity at J.P. Morgan Asset Management, made the following comment:
“There is a massive amount of interest from clients around tokenization. And we expect to be a leader in this space and work with clients to make sure that we have a product lineup that allows them to have the choices that we have in traditional money-market funds on blockchain.”
All MONY transactions will be recorded on the Ethereum blockchain. Investors can access the fund through JPMorgan’s Morgan Money platform, which is used for money-market investing. After subscribing, investors receive digital tokens that are stored in their crypto wallets.
JPMorgan Chase & Co. (NYSE:JPM) is one of the world’s largest financial institutions, with operations spanning banking, investing, payments, and asset management.
11. International Business Machines Corporation (NYSE:IBM)
Dividend Yield as of December 16: 2.22%
International Business Machines Corporation (NYSE:IBM) is one of the best dogs of the Dow to invest in.
IBM and Pearson announced on December 11 that they are teaming up on a global partnership focused on AI-powered learning. The goal is to build more personalized learning tools for businesses, public-sector groups, and schools. These products are designed to help individuals acquire the right skills more quickly and transition smoothly between roles.
Pearson, which is based in London, pointed to recent research showing how costly skills gaps have become. According to the study, inefficient career moves and mismatched skills are draining about $1.1 trillion a year from the U.S. economy in lost earnings.
Under the partnership, International Business Machines Corporation (NYSE:IBM) will help Pearson develop a custom AI-driven learning platform. It will be similar to IBM Consulting Advantage and will combine human expertise with AI assistants, agents, and digital tools. Pearson’s enterprise learning products will also be rolled out across IBM’s customer base and its workforce of around 270,000 employees.
The two companies also plan to explore tools that can verify what AI agents are actually capable of doing. The idea is to give organizations more confidence as they put these systems to work.
IBM CEO Arvind Krishna made the following statement:
“IBM and Pearson are bringing AI-powered education to more organizations to help people learn faster. Together, we’re helping companies and their teams adapt to change and succeed, while helping Pearson transform its own internal operations.”
International Business Machines Corporation (NYSE:IBM) is a technology company best known for its software, consulting business, and its focus on hybrid cloud and AI solutions.
10. Honeywell International Inc. (NASDAQ:HON)
Dividend Yield as of December 16: 2.41%
Honeywell International Inc. (NASDAQ:HON) is one of the best dogs of the Dow to invest in.
On December 15, Evercore ISI analyst Alexander Virgo started coverage on Honeywell International Inc. (NASDAQ:HON), assigning an Outperform rating and a $255 price target. In a note to investors, he said the company’s “picks and shovels” exposure within the multi-industrials space gives investors a way to benefit from strong underlying cycles.
He added that industrial stocks tend to beat the broader market when growth becomes more valuable, something the firm expects to see again in 2026. With supply chains still tight and pricing power holding up well, the analyst believes Honeywell is positioned for solid earnings momentum heading into FY26. The call came as Evercore launched coverage on nine companies across the US and European power and automation markets.
Separately, on December 12, Hornets Sports & Entertainment and Honeywell International Inc. (NASDAQ:HON) announced a multi-year strategic partnership that names Honeywell as the Official Building Automation Partner of the Charlotte Hornets. As part of the agreement, Honeywell will roll out its AI-driven technologies to improve safety and efficiency across HSE’s two main facilities: the Spectrum Center and the Novant Health Performance Center, benefiting fans, players, and staff.
At the Spectrum Center, which hosts the Hornets’ NBA games, Honeywell will install advanced security and building integration systems following a major renovation. As part of the update, the level that includes player and talent locker rooms, along with premium club spaces, will now be known as the Honeywell Event Level.
Honeywell International Inc. (NASDAQ:HON) is a diversified operating company with a global footprint, serving customers across many industries. Its business is supported by the Honeywell Accelerator operating system and the Honeywell Forge platform.
