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Dow Jones Dividend Leaders
0.43%January 08 | MyPlanIQ portfolio symbol P_35620

  • Portfolio Overview
  • Asset Allocation and ETFs
  • Performance
  • Calculators
  • Rolling Returns
  • Drawdowns

Portfolio Overview


We continue to work on a series of selections of the Dow Jones Industrial Average.  The Dow (INDEX: ^DJI) is made up  of only 30 stocks which make up more than a quarter of the  U.S. stock market. Given that we are in troubled times and the large companies are going to be the ones that will best weather out the storms, we are looking for and grading filters that help us to come up with stock selection idas.

John Maxfield of the Motley Fool has done some interesting research where he selected and ranked what are arguably the Dow's 10 best dividend-paying stocks.

1. Rank by screening for the Dow's 10 best-yielding stocks:

Company

Dividend Yield
AT&T (NYSE: T) 5.89%
Verizon Communications (NYSE: VZ) 5.37%
Merck (NYSE: MRK) 4.64%
Pfizer (NYSE: PFE) 4.23%
DuPont (NYSE: DD) 3.66%
General Electric (NYSE: GE) 3.63%
Intel (Nasdaq: INTC) 3.57%
Johnson & Johnson (NYSE: JNJ) 3.54%
Kraft Foods (NYSE: KFT) 3.28%
Travelers(NYSE: TRV) 3.24%

Source: Yahoo! Finance (as of Oct. 17, 2011).

2. Ranked and scored according to sustainability, predictability, and general quality:

  • Sustainability -- dividend's size relative to free cash flow per share.
  • Predictability -- when the company started paying a dividend.
  • Quality -- leverage the Fool's CAPS scores

3. Add upand ran the scores:

Company

FCF Payout Ratio (Points)

Year Started Paying Dividends (Points)

Caps Rating (Points)

Total Points
General Electric 26% (10) 1899 (9) 4 (8) 27
Pfizer 28% (8) 1939 (6) 4 (8) 22
Johnson & Johnson 48% (5) 1944 (5) 5 (10) 20
DuPont 59% (3) 1904 (8) 4 (8) 19
Merck 52% (4) 1935 (7) 4 (8) 19
Travelers 27% (9) 1990 (3) 3 (6) 18
AT&T 70% (2) 1881 (10) 3 (6) 18
Verizon Communications 47% (6) 1984 (4) 4 (8) 18
Intel 43% (7) 1992 (2) 4 (8) 17
Kraft Foods 131% (1) 2001 (1) 4 (8) 10

Source: S&P Capital IQ, DividendInvestor.com, and Motley Fool CAPS (as of Oct. 13, 2011). FCF payout ratio uses operating cash flow less capital expenditures as measure of free cash flow.

There are three benefits to using this filter

  1. Using Dow stocks, we know that these are all large organizations
  2. Dividends are an important component and often reflect well run companies
  3. We want to be aware of companies using dividends as a means of attracting investors but where performance might be weak

Hopefully this filter will enable us to sort out which look like a good investment.

We will create two portfolios -- the whole group as they are all strong companies and just the top five to see what differences they throw up. We will, of course, compare this with out reference dividend bearing ETF portfolio.

Click here for more portfolio details and features ►

Asset Allocation


Symbol Category/Sector Target Weight
TRV
The Travelers Companies, Inc. 		EQUITY 10%
GE
General Electric Company 		EQUITY 10%
T
AT&T Inc. 		EQUITY 10%
JNJ
Johnson & Johnson 		EQUITY 10%
PFE
Pfizer Inc. 		EQUITY 10%
VZ
Verizon Communications Inc. 		EQUITY 10%
MRK
Merck & Co., Inc. 		EQUITY 10%
DD
DuPont de Nemours, Inc. 		EQUITY 10%
INTC
Intel Corporation 		EQUITY 10%
KFT
KFT 		EQUITY 10%


Historical Performance


Name YTD Return 1Yr AR 3Yr AR 5Yr AR 10Yr AR 15Yr AR 20Yr AR Inception
Dow Jones Dividend Leaders 0.25% 5.94% 3.69% 6.86% 5.46% 8.23% 6.47% 5.19%
VFINX (VANGUARD 500 INDEX FUND INVESTOR SHARES) 0.64% 25.78% 9.74% 14.44% 13.04% 13.59% 10.37% 9.17%
VSMGX (VANGUARD LIFESTRATEGY MODERATE GROWTH FUND INVESTOR SHARES) 0.16% 11.15% 2.90% 5.94% 6.05% 6.80% 5.91% 5.94%
Data as of 01/08/2025, AR inception is 08/05/2001

Dow Jones Dividend Leaders Return Calculator

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Calculators


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Rolling Returns


From 08/05/2001 to 01/08/2025, the worst annualized return of 3-year rolling returns for Dow Jones Dividend Leaders is -8.93%.

From 08/05/2001 to 01/08/2025, the worst annualized return of 5-year rolling returns for Dow Jones Dividend Leaders is -6.31%.

From 08/05/2001 to 01/08/2025, the worst annualized return of 10-year rolling returns for Dow Jones Dividend Leaders is 1.16%.


Maximum Drawdown

Dow Jones Dividend Leaders Maximum Drawdown