Dogs of the Dow Countdown – Week 4

The big change this week is that Pfizer (PFE) vaulted to the top of the list after raising their quarterly dividend from .24 to .29, an increase of 21%. PFE is now yielding 4.46%. Although Pfizer has well-known problems, the shares appear to be undervalued in relation to their dividend yield and future prospects. There is an excellent post by Fat Pitch Financials on SeekingAlpha setting forth the case for Pfizer.

Anything can happen in a week, and other Dow stocks could raise their dividends, but we are probably looking at something closely resembling the final Dogs of the Dow list as of December 29, 2006.

The market is looking toppy and the yield of the 10-year bond has risen to 4.62%. I would not be surprised to see a shakeout in the days ahead, although perhaps not a full-scale correction just yet. The energy sector weakened this week but the Philadelphia Bank Index is starting to strengthen against the S&P 500, and that is always a good sign for the overall stock market.


One Response to “Dogs of the Dow Countdown – Week 4”

  1. Buying Pfizer (PFE) « Alligator Investor Says:

    […] Buying Pfizer (PFE) Today is buying day for the Dogs of the Dow. I already own these stocks. My only new Dogs investment this year is to increase my position in Pfizer by 50%. I just accomplished that with a limit order to buy at 25.90. These shares, which are yielding 4.48%, will make a nice complement to the ones I purchased last December at 20.19. The bearish case for Pfizer was succinctly summarized by Prakash Kolli in an article recently syndicated by SeekingAlpha. However, people were even more bearish on Pfizer last December. The shares I purchased then are up 28% for the year and my original investment is now yielding more than 7% due to dividend increases. […]

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