The 5 Highest-Yielding Dogs of the Dow Are Among Our Top Q4 Picks

"The Dogs of the Dow is a well-known strategy first published in 1991 by Michael O'Higgins. The plan aims to maximize investment yields by purchasing the 10 highest-yielding dividend stocks from the Dow Jones Industrial Average each year. The highest-yielding stocks are also the lowest-priced stocks in the venerable average, as the lower a stock (or bond) is priced, the higher the attached yield or coupon becomes."

"With approximately $1.6 trillion in global sales, the pharmaceutical industry is a steadily growing sector driven by the rise of personalized medicine, the increase of chronic diseases, and an aging global population. At 24/7 Wall St., we have consistently believed that investing in the pharmaceutical industry offers our readers a range of potential opportunities. Plus, most across the investment world still consider the industry defensive, so it is not a bad idea, given the current market volatility."

"We mention this, as three of the highest-yielding Dogs of the Dow are some of the top companies in the pharmaceutical/healthcare sector, and all three trade at bargain levels. The best part is that all three have very different business models and product silos, so you don't duplicate exposure to the sector. The other two companies are perfect plays for a slowing economy where interest rates are poised to fall. All five of the dogs are rated Buy at top Wall Street firms."

The Dogs of the Dow strategy selects the 10 highest-yielding dividend stocks in the Dow each year to maximize income, with higher yields often reflecting lower share prices. The pharmaceutical sector, about $1.6 trillion in global sales, benefits from personalized medicine advances, rising chronic disease prevalence, and an aging population, and remains regarded as defensive amid market volatility. Currently three of the top-yielding Dogs are major pharmaceutical/healthcare firms trading at bargain valuations across diverse business models, while the other two are positioned to benefit from slowing growth and falling interest rates. All five are rated Buy by major firms, and the Dogs have historically outperformed the broader Dow.

Read at 24/7 Wall St.