If you like dividends, the Dow Jones Industrials (DJINDICES:^DJI) are a great place to start. All 30 components of the Dow pay dividends, and the blue chip companies that make up the average are among the biggest and most important businesses in the global economy.

You can invest directly in the Dow through exchange-traded funds, but many investors prefer a strategy that emphasizes dividend income. Known as the Dogs of the Dow, the strategy involves buying a set of stocks at the beginning of each year and holding them for the entire 12-month period. Below, you'll see the stocks that qualify as the 2018 Dogs of the Dow, along with some more information about this strategy.

The 2018 Dogs of the Dow

Stock

Dividend Yield

Rank in 2017

Verizon

4.5%

1

IBM

3.9%

7

Pfizer

3.8%

2

ExxonMobil

3.7%

8

Chevron

3.5%

3

Merck

3.4%

10

Coca-Cola

3.2%

6

Cisco Systems

3%

5

Procter & Gamble (NYSE:PG)

3%

-

General Electric (NYSE:GE)

2.8%

-

Source: DogsoftheDow.com.

Here are 2018's new Dog stocks

Stocks see their yields change over the course of a year, in part because of share-price moves and in part because of changes to dividend payments. That leads to changes in the Dogs from year to year, as strong-performing stocks move out of the group and weaker performers cycle in. In 2017, great returns from Dow leaders Boeing and Caterpillar led to their graduating out of the Dogs, with Procter & Gamble and General Electric replacing them.

Dog on the floor with paw on a calculator and money fanned out in front.

Image source: Getty Images.

Procter & Gamble's addition came even though the stock did reasonably well, with its share price climbing 8% in 2017. A year of difficult conditions in the consumer-retail environment weighed on the household-products giant, and strong competition, both domestically and internationally, held P&G back from further gains. In addition, a high-profile proxy fight with activist investor Nelson Peltz ended with a very narrow victory for the company, highlighting the level of discontent among investors in P&G.

Few expect much recovery in the global consumer-goods space, and many of the challenges in Procter & Gamble's corporate culture remain. Yet for income investors, the company has been a stalwart, ranking among the top Dividend Aristocrats for consecutive annual dividend increases.

General Electric is an unusual addition to the group, because it actually cut its dividend late in 2017. Yet the Dow stock's losses during the year were even larger in percentage terms than the payout reduction, giving GE the No. 10 spot among the Dogs.

General Electric remains a topic of intense debate, with some seeing huge potential for a recovery from the venerable industrial giant. Others fear that new management will have trouble refocusing the colossus in new directions after ill-timed forays into the power and energy segments have proved costly. Even if General Electric gets taken out of the Dow because of its low share price and negligible influence on the average, Dogs investors will need to stick with it throughout 2018 in order to let the strategy play out.

Will the Dogs top the Dow in 2018?

The Dogs of the Dow have a chip on their shoulder this year, because 2017 gave the strategy a poor performance. The Dogs returned just 19% in 2017 compared to a 25% rise in the Dow, as a whole. Although dividend income was slightly higher for the Dogs, it wasn't enough to make up a 6 percentage point shortfall.

Before that, though, the Dogs had produced outsized returns in six of the seven previous years, missing only 2012. As a long-term strategy, the Dogs have been relatively mixed, with roughly equal numbers of market-beating and market-trailing returns.

For 2018, the biggest thing to watch is whether the energy segment bounces back. With both of the Dow's integrated oil giants, as well as General Electric among the Dogs, a recovery in oil and natural gas could spur outperformance. By contrast, if underrepresented trends in the Dogs, such as industrials and financials, continue to do well, then the Dogs could suffer another defeat to the Dow in 2018.

Dan Caplinger owns shares of Boeing. The Motley Fool owns shares of and recommends Verizon Communications. The Motley Fool recommends Cisco Systems. The Motley Fool has a disclosure policy.