The Best Dogs Of The Dow Jones As Of December 2012

Many people try to find an answer of how to make money with stocks and how to generate a second income that is high enough to retiree a few years earlier in order to enjoy the rest lifetime. Most investors try to search a safe investment strategy that works really well. A Strategy that is simple enough to understand and easy to implement. Some investment strategies fail, others work well but every tactic is not forever. It comes the time when the market forces change.

One strategy I cover in my blog “long-term-investments.blogspot.com” on a regular basis is the Dogs of the Dow Jones philosophy. The strategy is to buy 10 stocks of the Dow Jones with the highest dividend yield and lowest price to earnings ratio at the beginning of the year and to hold these stocks for a year. After this period, the investor should sell stocks that are no more Dogs of the Dow and buy therefore new Dogs of the Dow. Below is an updated sheet of the 10 best Dogs of the Dow. Such stocks have the lowest expected price to earnings ratio and highest dividend yield within the Dow Jones Index.

The 10 cheapest stocks of the Dow Jones have an average dividend yield of 3.83 percent as well as a forward P/E ratio of 12.10. The average P/B ratio amounts to 2.38 and P/S ratio is 1.99.

Here are the 3 best yielding Dogs of the Dow Jones:

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AT&T (NYSE:T) has a market capitalization of $191.64 billion. The company employs 241,130 people, generates revenue of $126.723 billion and has a net income of $4.184 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $27.595 billion. The EBITDA margin is 21.78 percent (the operating margin is 7.27 percent and the net profit margin 3.30 percent).

Financial Analysis: The total debt represents 23.95 percent of the company’s assets and the total debt in relation to the equity amounts to 61.36 percent. Due to the financial situation, a return on equity of 3.63 percent was realized. Twelve trailing months earnings per share reached a value of $0.77. Last fiscal year, the company paid $1.73 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 43.77, the P/S ratio is 1.51 and the P/B ratio is finally 1.89. The dividend yield amounts to 5.33 percent and the beta ratio has a value of 0.55.

Long-Term Stock History Chart Of AT&T (T)

Long-Term Dividends History of AT&T (T)

Long-Term Dividend Yield History of AT&T (T)

Verizon Communications (NYSE:VZ) has a market capitalization of $124.26 billion. The company employs 184,500 people, generates revenue of $110.875 billion and has a net income of $10.198 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $29.376 billion. The EBITDA margin is 26.49 percent (the operating margin is 11.62 percent and the net profit margin 9.20 percent).

Financial Analysis: The total debt represents 23.93 percent of the company’s assets and the total debt in relation to the equity amounts to 153.33 percent. Due to the financial situation, a return on equity of 6.45 percent was realized. Twelve trailing months earnings per share reached a value of $1.07. Last fiscal year, the company paid $1.98 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 40.59, the P/S ratio is 1.12 and the P/B ratio is finally 3.43. The dividend yield amounts to 4.73 percent and the beta ratio has a value of 0.50.

Long-Term Stock History Chart Of Verizon Communications (VZ)

Long-Term Dividends History of Verizon Communications (VZ)

Long-Term Dividend Yield History of Verizon Communications (VZ)

Merck & Co. (NYSE:MRK) has a market capitalization of $125.92 billion. The company employs 84,000 people, generates revenue of $48.047 billion and has a net income of $6.392 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $15.478 billion. The EBITDA margin is 32.21 percent (the operating margin is 15.26 percent and the net profit margin 13.30 percent).

Financial Analysis: The total debt represents 16.66 percent of the company’s assets and the total debt in relation to the equity amounts to 32.13 percent. Due to the financial situation, a return on equity of 11.49 percent was realized. Twelve trailing months earnings per share reached a value of $2.20. Last fiscal year, the company paid $1.52 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 18.82, the P/S ratio is 2.62 and the P/B ratio is finally 2.31. The dividend yield amounts to 4.15 percent and the beta ratio has a value of 0.64.