As it turned out, neither of the Dow’s two losing stocks were among the Dogs. Verizon Communications Inc. (NYSE:VZ) was the weakest-performing Dog, rising just 1% as it continues to deal with the mixed blessing of huge levels of smartphone sales. Investors tend to balk at the huge upfront subsidies that Verizon and its telecom rivals have to pay in order to make the most popular smartphone models more affordable. Yet what those same investors seem to forget is that Verizon makes up for those subsidies through extremely high-priced data subscription charges, with rates well above what those who use low-cost carriers have to pay on a monthly basis.
What will the rest of 2013 bring?
As a long-term investing strategy, the Dogs of the Dow have a checkered past, and looking too closely at monthly returns will give you a short-term trader’s focus and distract you from the big picture. But with high-dividend stocks slightly outperforming their lower-yielding peers, the Dogs’ success shows that investors’ love affair with dividends still has some room to run.
The article How the Dogs of the Dow Did in January originally appeared on Fool.com and is written by Dan Caplinger.
Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends McDonald’s. The Motley Fool owns shares of McDonald’s.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.