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.
9. NIKE, Inc. (NYSE:NKE)
Dividend Yield as of December 16: 2.45%
NIKE, Inc. (NYSE:NKE) is among the best dogs of the Dow to invest in.
On December 10, Guggenheim began covering NIKE, Inc. (NYSE:NKE) with a Buy rating and set a $77 price target. While retail is still widely viewed as “structurally sick,” the firm said the “holiday brought the cheer.” It added that tariffs have been manageable so far and pointed to what it called “most importantly and likely going unnoticed,” noting that most of the companies it covers are operating at, or very near, peak gross margins.
In separate news, NIKE, Inc. (NYSE:NKE) and LSU announced on December 11 that they are extending their partnership, a relationship that has been in place for more than 50 years. The new agreement runs through 2036 and opens the door to a fresh chapter of athlete-first innovation and closer collaboration in Baton Rouge. It also reinforces the deep ties between Nike and LSU, a program that has long been at the center of elite collegiate competition.
Alongside the extension, Nike is launching Nike Blue Ribbon Elite. It is a first-of-its-kind program aimed at reshaping the NIL space through deeper, more direct collaboration with athletes and schools, starting with LSU. The move reflects the company’s long-standing identity as a brand built for athletes and underscores its ongoing focus on inspiring and supporting the next generation through partnerships, innovation, and storytelling that help expand sport worldwide.
NIKE, Inc. (NYSE:NKE) designs, develops, manufactures, markets, and sells athletic footwear, apparel, equipment, accessories, and services, and operates as a global leader in sports and lifestyle products.
8. Johnson & Johnson (NYSE:JNJ)
Dividend Yield as of December 16: 2.49%
Johnson & Johnson (NYSE:JNJ) is one of the best dogs of the Dow to invest in.
On December 15, BofA raised its price target on Johnson & Johnson (NYSE:JNJ) to $220 from $204. The firm kept a Neutral rating. The firm says J&J’s premium multiple “looks appropriate for its growth plus asset mix.” It is now valuing the stock based on a new FY27 EPS estimate.
Johnson & Johnson (NYSE:JNJ) has already had a big year. Shares are up more than 45% in 2025. However, things turned a bit on December 12, when a California jury awarded $40m to two women who said Johnson & Johnson’s baby powder caused their ovarian cancer. The case was heard in the Los Angeles Superior Court.
The jury awarded $18m to Monica Kent and Deborah Schultz and her husband received $22m. Jurors said the company knew for years that its talc-based products were dangerous and did not warn consumers.
Johnson & Johnson (NYSE:JNJ) says it will fight the decision. Erik Haas, the company’s worldwide vice-president of litigation, said J&J plans to “immediately appeal this verdict and expect to prevail as we typically do with aberrant adverse verdicts.”
This case is part of a much larger wave. Court filings show more than 67,000 plaintiffs have sued J&J, claiming cancer diagnoses tied to baby powder and other talc products. The company maintains that its products are safe, asbestos-free, and do not cause cancer. J&J stopped selling talc-based baby powder in the US in 2020. It switched to a cornstarch version instead.
Away from the lawsuits, the business itself hasn’t changed much. Johnson & Johnson (NYSE:JNJ) remains a global healthcare heavyweight. Its focus sits squarely on Innovative Medicine and MedTech, spanning oncology, immunology, surgical tools, and steady investment in R&D and global health work.
7. UnitedHealth Group Incorporated (NYSE:UNH)
Dividend Yield as of December 16: 2.66%
UnitedHealth Group Incorporated (NYSE:UNH) is among the best dogs of the Dow to invest in.
In a latest development, UnitedHealth Group Incorporated (NYSE:UNH) has agreed to sell Banmedica, its last remaining business in South America, to Brazilian private equity firm Patria Investments. The deal is valued at $1 billion.
This has been a long time coming. UnitedHealth Group Incorporated (NYSE:UNH) has been working its way out of Latin America since 2022. It already sold operations in Brazil and Peru. Banmedica, which operates in Colombia and Chile, was the final piece. Talks around this sale have been going on for close to a year.
As of June, Banmedica served about 1.7 million health insurance members. It also ran seven hospitals and 47 medical centers, after exiting Peru earlier. The exit clears another hurdle for CEO Stephen Hemsley, who has been focused on getting the business back on track.
In October, UnitedHealth raised its annual profit forecast and said it expects growth to return in 2026, with momentum building in 2027. The retreat hasn’t been cheap. Last year, the company booked an $8.3 billion loss tied to its South American exits. About $7.1 billion came from Brazil, with another $1.2 billion linked to Banmedica.
UnitedHealth Group Incorporated (NYSE:UNH) is an American company that operates mainly through two units, UnitedHealthcare and Optum, covering insurance, care delivery, data, and health services at scale.
6. The Coca-Cola Company (NYSE:KO)
Dividend Yield as of December 16: 2.88%
The Coca-Cola Company (NYSE:KO) is among the best dogs of the Dow to invest in.
The company’s plan to sell Costa Coffee is close to falling apart, according to a report by The Financial Times. The Coca-Cola Company (NYSE:KO) held what were meant to be last-ditch talks with private equity firm TDR Capital over the weekend, hoping to keep the process alive. People familiar with the situation say the discussions failed to gain traction.
TDR, the owner of Asda, had been chosen as Coca-Cola’s preferred bidder earlier last week. That decision followed a board meeting in New York. The choice looked settled at the time. Negotiations between Coca-Cola, its advisers at Lazard, and TDR have run into trouble over valuation. The price gap has proved hard to bridge, according to one person involved.
The Coca-Cola Company (NYSE:KO) is now expected to decide next week whether to walk away from the sale entirely. The current structure would see Coca-Cola keep a minority stake in Costa, which could be increased in Coca-Cola’s favor if it helps close a deal. Even so, agreement remains uncertain.
The Coca-Cola Company (NYSE:KO) had been targeting a price of around £2bn for Costa, as previously reported by the Financial Times. That figure is well below what the company paid in 2018. Coca-Cola spent £3.9bn to buy Costa from Whitbread, the owner of Premier Inn. Since then, the chain has struggled to keep pace with smaller independent cafés and value-focused competitors like Greggs. Footfall has been uneven, and margins have faced pressure.
TDR is interested in Costa’s UK and international operations, excluding China. The firm also co-owns EG Group, the petrol forecourt operator, which already runs a large network of food and beverage outlets.
The Coca-Cola Company (NYSE:KO) operates as a global drinks powerhouse that makes and sells everything from its flagship soda to water, tea, coffee, juice, and sports drinks. Its portfolio spans more than 200 brands, distributed worldwide through local bottling partners.
5. The Procter & Gamble Company (NYSE:PG)
Dividend Yield as of December 16: 2.91%
The Procter & Gamble Company (NYSE:PG) is one of the best dogs of the Dow to invest in.
On December 8, Deutsche Bank lowered its price target on The Procter & Gamble Company (NYSE:PG) to $171 from $176 and kept a Hold rating after meeting with management. The firm’s view was that the stock may require more time to play out.
The Procter & Gamble Company (NYSE:PG)’s core strength remains its brand portfolio. The company owns a wide range of household and personal care brands that are deeply embedded in daily consumer habits. That positioning gives it the ability to raise prices when costs increase, without meaningfully disrupting demand.
The business has also shown it can perform steadily in a difficult operating backdrop. Its supply chain is well run, and its exposure across categories and regions provides balance. Weakness in one area does not derail the overall picture, as the company can rely on segments or markets that are holding up better.
At the moment, growth is being driven primarily by regions outside North America. Greater China and Latin America are showing the strongest momentum. Within the portfolio, skin and personal care continue to perform well, while other areas are seeing minimal growth or modest declines in organic sales.
In addition, Consistency remains a defining feature of The Procter & Gamble Company (NYSE:PG). The company has paid dividends for 135 years and increased its payout for 69 consecutive years. As of December 16, the dividend yield was around 2.9%, which remains above the broader market average and underscores the stability of the business.
4. Amgen Inc. (NASDAQ:AMGN)
Dividend Yield as of December 16: 3.11%
Amgen Inc. (NASDAQ:AMGN) is among the best dogs of the Dow to consider.
On December 8, HSBC lifted its price target on Amgen Inc. (NASDAQ:AMGN) to $425 from $381. The firm also retained a Buy rating. The call came as part of the firm’s 2026 outlook for the pharma sector. HSBC sees the group in a strong position heading into 2026, “even more so if AI panic kicks in.” While its top picks lean toward “growth bucket ideas,” the firm noted that “fallen angels and value could work as well.”
On December 11, Amgen Inc. (NASDAQ:AMGN) shared separate news. The U.S. Food and Drug Administration approved UPLIZNA for the treatment of generalized myasthenia gravis, or gMG. The decision gives patients a new targeted option that could offer long-term disease control with just two doses a year, following the initial loading doses.
Samantha Masterson, president and chief executive officer of the Myasthenia Gravis Foundation of America, made the following remark:
“Managing a rare and chronic illness can mean facing unpredictable relapsing symptoms and demanding treatment schedules. This approval marks an important milestone, offering durable efficacy and a dosing schedule that provides people living with generalized myasthenia gravis six months of treatment-free time between maintenance doses.”
gMG is a rare and unpredictable autoimmune condition driven by B cells. It disrupts communication between nerves and muscles, leading to fluctuating muscle weakness that can worsen without warning. In the US, myasthenia gravis affects an estimated 80,000 to 100,000 people.
Amgen Inc. (NASDAQ:AMGN) focuses on discovering, developing, manufacturing, and delivering innovative medicines, with an emphasis on biologics. Its work spans serious conditions including cancer, inflammation, heart disease, and rare disorders.
3. Merck & Co., Inc. (NYSE:MRK)
Dividend Yield as of December 16: 3.48%
Merck & Co., Inc. (NYSE:MRK) is one of the best dogs of the Dow to invest in.
On December 15, BofA raised its price target on Merck & Co., Inc. (NYSE:MRK) to $120 from $105 and kept a Buy rating. The analyst said the stock is starting to look more appealing as the pipeline has “rounded out,” and noted that the firm is now basing its valuation on a new FY27 EPS estimate.
That optimism comes against a mixed backdrop. Sales of Merck’s HPV vaccines, Gardasil and Gardasil 9, have dropped sharply this year, largely because demand in China has cooled. At the same time, Keytruda, the cancer drug that drives a large share of Merck & Co., Inc. (NYSE:MRK)’s revenue, is staring down tougher competition over the next five years, including the eventual arrival of biosimilars. Investors looking ahead have been uneasy with what that means for the company’s medium-term growth profile.
Still, Merck & Co., Inc. (NYSE:MRK) is not standing still. New approvals and a deeper pipeline are expected to help offset pressure on its biggest franchises. One clear example is in vaccines. Last year, the company won approval for Capvaxive, a pneumonia vaccine designed to reach a broader group of patients than competing options. Since then, the launch has gained traction. In the third quarter alone, Capvaxive brought in $244 million in sales.
Merck & Co., Inc. (NYSE: MRK) operates as a global biopharmaceutical company focused on discovering, developing, and delivering medicines, vaccines, and animal health products, with the aim of improving and saving lives around the world.
2. Chevron Corporation (NYSE:CVX)
Dividend Yield as of December 16: 4.65%
Chevron Corporation (NYSE:CVX) is among the best dogs of the Dow to invest in.
On December 12, Mizuho boosted its price target on Chevron Corporation (NYSE:CVX) up to $206 from $204 and kept an Outperform rating. The update came as part of the firm’s broader 2026 outlook for the exploration and production space. While sentiment around U.S. oil and gas stocks remains weak, driven by worries over oil oversupply and elevated gas storage levels, Mizuho sees “underappreciated value” across the group.
The analyst pointed to longer-term fundamentals in E&P that could start to show through in 2026. As a result, the firm is encouraging a shift in risk toward oil-focused E&Ps, with a selective approach to gas names, while taking a more neutral stance on refining.
Chevron Corporation (NYSE:CVX) also made headlines this week for its activity in Venezuela. According to Bloomberg, the company lowered prices on Venezuelan crude sold to US refiners after a tanker was seized by American forces in the Caribbean and as global oil prices continued to soften.
People familiar with the matter said Chevron sold a batch of Venezuelan crude on December 11, just one day after US forces seized a vessel off the country’s coast. That oil was priced below a batch offered earlier in December, reflecting the changing backdrop.
In a statement, Chevron Corporation (NYSE:CVX) said its operations in Venezuela remain fully compliant with all applicable laws and regulations, as well as US government sanctions frameworks.
Despite the heightened tensions, the company appears to be pressing ahead. Chevron sold roughly 10 cargoes of Venezuelan oil, spanning different grades, for loading next month. The sales were split across two tenders, though specific pricing details were not disclosed.
Chevron Corporation (NYSE:CVX) is a major integrated energy company with operations that span the full value chain, from finding and producing oil and natural gas to transporting and selling them. The company also refines fuels and lubricants, manufactures petrochemicals, and invests in lower-carbon energy solutions.
1. Verizon Communications Inc. (NYSE:VZ)
Dividend Yield as of December 16: 6.79%
Verizon Communications Inc. (NYSE:VZ) is among the best dogs of the Dow to invest in.
On December 16, Verizon Communications Inc. (NYSE:VZ) and Array Digital Infrastructure announced a new strategic partnership aimed at strengthening Verizon’s 5G network. The deal gives Verizon access to Array’s nationwide tower footprint, helping the carrier expand coverage and deliver a faster, more reliable experience for customers.
The agreement runs for multiple years and allows Verizon Communications Inc. (NYSE:VZ) to place its equipment on a large number of newly built Array tower sites over time. It also introduces a simplified pricing model for those locations, which is designed to improve cost efficiency and provide more predictable, long-term economics.
Phillip French, Vice President of Engineering for Verizon, made the following statement:
“This strategic partnership with Array is a key part of our network tower management strategy. It provides us with the nimbleness and flexibility to manage our network portfolio efficiently. The streamlined agreement allows for greater cost efficiency and, most importantly, accelerates our ability to deploy advanced wireless technologies to Verizon customers across the nation.”
Array owns and operates roughly 4,400 towers across the US, stretching from coast to coast. That footprint supports the rollout of 5G and other wireless technologies in a wide range of markets.
Verizon Communications Inc. (NYSE:VZ) is one of the largest technology and telecommunications companies in the U.S. Its offerings include wireless services across 5G and 4G, home internet through Fios fiber and 5G, along with TV, phone, and a range of advanced technology solutions.
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