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Dogs of the Dow As Of July 2016

The Dogs of the Dow is an investment strategy that gained popularity in the 1990’s which proposes that an investor buy and hold the 10 stocks from the 30 in the Dow Jones Industrial Average with the highest dividend yields each year. 

The reasoning is that because the dividends of Dow stocks don’t vary with the price of the stock and if we believe that a company’s dividend is a good measure of the value of a company then by buying companies with a high dividend yield, we’re systematically buying those companies that are at the bottom of their business cycle and are more likely to see the stock price increase faster than their lower yielding counterparts. 

The Dogs of the Dow for July 2016 are :

4 Top High-Yielding Dividend Stocks With Buy Rating

While the post-Brexit rally has been outstanding, the market looks very overbought and ready to digest some of the big gains we have seen.

The good thing for investors is there is absolutely nothing wrong with that, and taking profits now makes very good sense. The question is what to do with the proceeds.

Cash is useless from a dividend standpoint, and the Treasury market is more overbought than the stock market.

However, good blue chips trading way off the highs may be a good answer. While the rising tide lifts all boats metaphor is usually correct, there are plenty of solid companies, some that reported great earnings, that are trading way below 52-week highs.

Today we screened our database and found four stocks rated Buy with dividends of at least 4% that fit in the not-overbought club, and they have solid upside to the current price targets.

These are the results in detail...

5 Top Dividend Stocks For A Winning Dividend Growth Portfolio

There are multiple styles of dividend investing out of which dividend growth is the most appealing. 

Stocks with dividend growth generally outperform their peers and generate increased profits year after year. 

Thus, the dividend growth strategy has an edge over the steady dividend strategy. By investing in stocks with dividend growth, investors can enjoy rising current income while awaiting capital appreciation. 

Dividend growth stocks also provide some margin of safety, which enables investors to withstand shocks. 

In fact, stocks that have a strong history of dividend growth, as opposed to those that have high yields, form a healthy portfolio. 

Moreover, these stocks often have superior fundamentals compared to other dividend paying stocks. This is because dividend growth is often an outcome of a sustainable business model, a long track record of profitability, rising cash flows, good liquidity, a strong balance sheet and some value characteristics. 

Here is a selection of stocks that could result in a winning dividend growth portfolio:

10 Nearly Safe High Yielding Stocks For Retirement Investors

As yields on the 10-year Treasury note fall to all-time lows and stock prices rise, the search for safety and return can be challenging.

Many know now that you will make loses if you buy bonds while rates rise in the mid and long-term. 

In my view, it's much better to buy high yielding dividend stocks with growth perspectives. 

Rising earnings and dividends will lead to higher stock prices when earnings multiples are the same.

High yields and price appreciation combine to make for interesting investing, and most of these companies are among the best blue-chip dividend stocks, due to their long histories of paying higher dividends.

Let's take a look at these top high-yield dividend stocks....

10 Top Yielding And Cheap Healthcare REITs For Income Seeking Investors

Real estate investment trusts, or REITs, can give investors exposure to real estate without the challenges and risks of buying property.

The senior population (65+) is expected to grow 80% between 2010 and 2030, and 85+ cohort by over 60%, increasing patient acuity.

It is estimated that ~70% of Americans who reach age 65 will require some form of long-term care for an average of 3 years.

Healthcare policy is the primary driver in which patients are being treated in low cost settings. 

Here is a great overview of property-owning REITs that can give you excellent dividends and lots of growth potential, listed in no particular order:

Dividend Yield of Major REITs (click to enlarge)
Source: Seeking Alpha

Price to FFO of Major REITs (click to enlarge) 
Source: Seeking Alpha

10 Top Yielding And Cheap Healthcare REITs
For Income Seeking Investors
(click to enlarge)