Every year, one of the best strategies is the Dogs of the Dow. You simply buy a basket of underperformers on the Dow Jones Industrial Average (DJIA) that pay dividends, and sell them by the end of the year.
The Strategy Behind the Dogs of the Dow
The Dogs of the Dow strategy is made up of two distinct parts. The first is to invest, and the second is to rebalance.
Part one: Invest equal amounts into the 10 highest-dividend-yielding stocks from the Dow Jones Industrial Average. Because the Dow Jones Industrial Average is widely regarded as a benchmark of the broader U.S. stock market, its component stocks represent the entire U.S. market. Furthermore, these are blue-chip stocks that are strong enough to withstand the test of time.
Part Two: Rebalance the portfolio every year into equal amounts of the 10 highest-yielding stocks in the Dow. The rationale for doing this every year goes back to research that indicates that, over the long term, the strategy generates higher returns then buying shares of an index fund tied to the DJIA, or even the S&P 500.
It’s a deceptively easy strategy, but it requires discipline. If this strategy appeals to you, here’s a cheat sheet to help you execute this strategy in 2026.
Dogs of the Dow: 2025 and 2026
For 2025, here's how the Dogs of the Dow are doing with just days to go.
- Verizon (NYSE: VZ), which yields 6.85%, started the year at around $38. It's now up to $40.
- Chevron (NYSE: CVX), which yields 4.54%, ran from about $142 to $150.50.
- Johnson & Johnson (NYSE: JNJ), which yields 2.5%, ran from $142 to $207.78.
- Amgen (NASDAQ: AMGN), which yields 3.02%, ran from about $258 to $334.
- Merck (NYSE: MRK), which yields 3.19%, traded between approximately $98 and $106.45.
- Coca-Cola (NYSE: KO), which yields 2.91%, jumped from $61 to $70.11 so far.
- IBM (NYSE: IBM), which yields 2.21%, ran from about $215 to a $304.56.
- Cisco (NASDAQ: CSCO), which yields 2.1%, ran from about $58 to $78.
- McDonald's (NYSE: MCD), which yields 2.37%, ran from about $293 to $313.
- Procter & Gamble (NYSE: PG), which yields 2.93%, fell from about $264 to $144.50.
That's not bad at all.
Plus, once you factor in the yields for each, the Dogs of the Dow outperformed the Dow Jones.
As for 2026, while the official list isn't out just yet, here's what's likely to make the list.
- Verizon (VZ), which yields 6.84%
- Chevron (CVX), which yields 4.56%
- Merck (MRK), which yields 3.2%
- Procter & Gamble (PG), which yields 2.92%
- Amgen (AMGN), which yields 3.04%
- Coca-Cola (KO), which yields 2.92%
- Nike (NYSE: NKE), which yields 2.72%
- UnitedHealth (NYSE: UNH), which yields 2.68%
- Home Depot (NYSE: HD), which yields 2.64%
- Johnson & Johnson (JNJ), which yields 2.51%
A Strategy With a Proven Track Record
Historically, the Dogs of the Dow do very well for income-oriented investors.
- The 2024 Dogs of the Dow underperformed the major indices in 2024. However, with dividends, investors still did well for the year.
- The 2023 Dogs of the Dow returned an average of 10.1%, which came in below the 14.4% return on the Dow Jones' Industrials. Still, with the appreciation in most of the 2023 Dogs coupled with dividends, investors still did well overall.
- The 2022 Dogs of the Dow beat the major indices, even in a rough year.
In fact, while the Dogs of the Dow stocks fell 1.6% on the year, once you add in the dividend payouts, the Dogs returned 2% on the year. And while 2% may not sound like a big win, consider that, in 2022, one of the worst years on record since 2008, the NASDAQ lost 33%. The S&P 500 lost 19%. The Dow Jones lost about 9%.
- In 2021, the Dogs of the Dow returned about 16.3%.
- In 2019, the Dogs were up 20%.
- In 2018, they were up about 1%, but still beat the Dow, which fell close to 6%.
- In 2017, the dogs were up 19%. In 2016, they were up 16%.
While 2020 wasn't a great year for the Dogs, it wasn’t great for a lot of stocks for obvious reasons. However, most other years, the Dogs of the Dow have performed very well.
Should You Buy the Dogs of the Dow in 2026?
The Dogs of the Dow remains one of the simplest income strategies available to retail investors, and its track record speaks for itself. While the strategy doesn't outperform every year, the long-term results show consistent dividend income and competitive total returns, especially during volatile market cycles. With yields still attractive and several blue-chip names likely to appear on the 2026 list, the setup for the coming year looks compelling. As always, discipline and annual rebalancing are key. For patient investors who value simplicity and dependable dividends, the Dogs of the Dow remain worth serious consideration.
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