The "Dogs of the Dow" — a strategy popularized by investor Michael O'Higgins in the early 1990s — comprises of the 10 members of the Dow Jones Industrial Average with the highest dividend yields.
By buying these names, investors bet on receiving a steady steam of cash payouts, in addition to their stock prices appreciating.
These stocks also tend to be of higher quality given their inclusion in the 30-stock Dow.
"The idea here is that just because they're 'Dogs of the Dow' — some of them really are dogs — and you have to be careful and selective as a stock picker," he told CNBC in an interview.
Similarly, had Nvidia not replaced Intel in the blue-chip index last month, Intel would have also made 2025's "Dogs of the Dow" list, Simpson added.
Persons:
Michael O'Higgins, Kevin Simpson, Simpson, Gamble, Dow —, Dow Jones, Sherwin, Williams, Goldman Sachs, —, Jesse Pound
Organizations:
Dow Jones, Dow, Verizon Communications, Chevron, Business Machines, Cisco Systems, Wealth, CNBC, McDonald's, Procter, Gamble, Verizon, Walgreens Boots Alliance, Walgreens, Amazon, Dow Inc, Nvidia, Intel, IBM
Locations:
Amgen