8 Dow Jones Stocks That Could Thrive in 2018

There’s an old stock-picking approach called the Dogs of the Dow, which assumes the 10 Dow Jones Industrial Average constituents with the highest dividend yields at the end of the year are likely to outperform their peers during the next year.

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There’s an old stock-picking approach called the Dogs of the Dow, which assumes the 10 Dow Jones Industrial Average constituents with the highest dividend yields at the end of the year are likely to outperform their peers during the next year. The strategy, which implies that high yields are actually a measure of value, isn’t a bad one. Few blue chips remain beaten down forever, especially when it comes to high-quality Dow stocks.

However, the Dogs of the Dow is a little too formulaic for some investors. The approach ignores the reality that – when limiting yourself to a small list of blue chips to begin with – you should be able to hand-pick future winners on merits other than a prior year’s underperformance.

With that as the backdrop, here a closer look at eight Dow stocks that could very well thrive in 2018 not because they did poorly in 2017, but just because they’re great (and generally underestimated) companies.

Data is as of Dec. 15, 2017. Dividend yields are calculated by annualizing the most recent quarterly payout and dividing by the share price. Stocks are listed in alphabetical order. Click on ticker-symbol links in each slide for current share prices and more.

James Brumley
Contributing Writer, Kiplinger.com
James Brumley is a former stock broker, registered investment adviser and Director of Research for an options-focused newsletter. He's now primarily a freelance writer, tapping more than a decade's worth of broad experience to help investors get more out of the market. With a background in technical analysis as well as fundamental analysis, James touts stock-picking strategies that combine the importance of company performance with the power of stock-trade timing. He believes this dual approach is the only way an investor has a shot at consistently beating the market. James' work has appeared at several websites including Street Authority, Motley Fool, Kapitall and Investopedia. When not writing as a journalist, James works on his book explaining his multi-pronged approach to investing.