Dogs of the Dow is an investment strategy where investors seek to buy companies that are having a high yield in the Dow Jones. The Dow index has dropped by more than 6.35% this year alone. It has fallen by more than 7.9% from its highest level this year. Here are some of the best Dogs of the Dow to buy in 2022.
IBM
IBM (NYSE: IBM) is one of the best-performing Dogs of the Dow stocks this year. Its stock is trading at $139, which is about 17.10% above the lowest level in March. This price is slightly below the year-to-date high of $141.91. Investors have bought IBM because of its strong earnings and the fact that its growth in the cloud computing business.
Analysts have also boosted their outlook of the stock, with those at Bank of America boosting their forecast to $165. Morgan Stanley also boosted their view to overweight. IBM has a dividend yield of 4.61% and a forward yield of 4.72%.
Chevron
Chevron (NYSE: CVX) is another Dogs of the Dow stock that has done well this year. Its stock jumped to an all-time high of $175 as the price of crude oil and natural gas surged. It has now retreated to $157 because of the volatility of the oil and gas companies.
Chevron has a dividend yield of 3.45% and a forward one of 3.61%. It has a healthy payout ratio of 65.31%, meaning that it has a room to keep growing its returns. While oil prices have slipped, they remain substantially above where they were last year. This means that the company will report strong earnings this year. Therefore, the Chevron stock price will likely keep rising.
Intel Corporation
Intel (NYSE: INTC) is a leading but highly embattled company in the semiconductor industry. The firm offers a diverse range of services to hardware developers. In the past few years, the company has come under high pressure as competition from the likes of Nvidia and AMD has risen. This explains why the stock has dropped by over 30% from its highest level in April last year.
Nvidia is also an extremely cheap stock that is trading at a trailing PE of 9.68. In comparison, companies like Texas Instrument, AMD, Qualcomm, and Broadcom have a PE of more than 20. Intel has a trailing dividend yield of 2.99% and a forward yield of 3.10%.
Other dogs of the Dow to consider are Verizon, Walgreens, Merck, 3M, Coca-Cola, and Amgen.
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