Performance Review: December 31, 2010

Below is the 7-year performance of our Dividend Watch List from December 31, 2010 to November 29, 2017 as compared to the Dow Jones Industrial Average.

symbol name total return
AWR American States Water 300.00%
LLY Eli Lilly & Co. 210.82%
CWT California Water Service 196.66%
ABT Abbott Laboratories 188.32%
JNJ Johnson & Johnson  178.51%
CLX Clorox Co. 170.20%
CAG ConAgra Foods, Inc. 165.58%
KMB Kimberly-Clark Corp. 146.61%
SYY Sysco Corp. 142.10%
CL Colgate-Palmolive Co. 111.14%
  average % change 181.00%
     
DJIA Dow Jones Industrial Average 117.83%

Observations

This watch list is appropriate for the Dogs of the Dow comparison that we’ve be working on recently.  The theory suggests buying the 10 highest dividend yielding stocks and holding them for one year and then selling.  In the one year period from January 1, 2011 to December 31, 2011, the above watch list had an equal weighted gain of +13.62%.  This is compared to the Dogs of the Dow gain of +12.20% in 2011.  This is contrasted with the Dow Jones Industrial Average gain of +5.50%.

In the breakdown of the various groups within the watch list, assuming that the positions were held in the top three stocks for only one year or until November 29, 2017, we have the following breakdown:

category 2010-2017 1 yr
top three 235.83% 22.88%
high yield 174.34% 22.77%
low yield 202.60% 7.99%
high p/e 202.60% 7.99%
low p/e 186.51% 14.62%

Notice that in the 1-year performance the top three highest yielding stocks gained +22.77%.  This seems to confirm the Dogs of the Dow theory.  Not far behind was the low p/e stocks with gains of +14.62%.  The laggards in this list were those that had a low yield and high p/e ratio.  In spite of lagging in the shorter term, the same low yield and high p/e stocks, have a much better long term cumulative gain in excess of the +28%.  In addition, the low yield and high p/e stocks exceeded the DJIA total return of +117.83%.

Out of the 13 US Dividend Watch Lists that we’ve surveyed so far, the highest performing for each date based on the respective categories are:

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