The Dow Jones Industrials (DJINDICES:^DJI) had a strong performance in 2019, extending a long string of solid gains during a decade-long bull market. Coming into 2020, investors are hoping for more of the same, but they're also thinking about how they can protect their portfolios if a reversal hits.

One way many conservative investors hedge their bets is by investing in dividend stocks. If you like the blue chip stocks that make up the Dow Jones Industrials, then one strategy known as the Dogs of the Dow could be exactly what you're looking for. Below, you'll find the new list of Dogs of the Dow for 2020, as well as some thoughts about the strategy and whether it makes sense for you.

The 2020 Dogs of the Dow


Dividend Yield

Rank in 2019






















Walgreens (NASDAQ:WBA)



Cisco Systems






Data source: Yahoo! Finance.

A trio of new pups for the Dogs of the Dow

The biggest appeal of the Dogs of the Dow strategy is its simplicity, as all you have to do is buy the 10 Dow stocks with the highest yields as of Dec. 31 and hold on to them throughout the following year. Because those yields rise and fall over time, the stocks that make the Dogs list typically change each year. However, some stocks have solid track records of paying high dividends, so many stocks carry over from year to year.

Dog in front of a laptop with a chart on it.

Image source: Getty Images.

In 2019, solid gains for three Dogs took them out of the running for 2020. JPMorgan Chase and Procter & Gamble jumped 43% and 36% respectively in 2019, sending their dividend yields sharply lower. Merck's 19% gain in 2019 wasn't quite as strong, but it was enough to give way to higher-yielding peers in the Dow.

By contrast, the three new Dogs for 2020 all had lackluster performance, posting losses for 2019 despite the overall market's substantial gains. A corporate reorganization at Dow left it in the Dow Jones Industrials at the expense of DuPont, and the chemical company's dividend yield was considerably higher than DuPont's had been.

Meanwhile, Walgreens suffered from some of the nervousness surrounding healthcare. Regulators in Washington have been looking for ways to reduce prescription drug costs, considering measures aimed at both drug distributors and pharmacy benefit management companies.

Finally, 3M had to deal with the headwinds that affected manufacturers across the globe. Healthcare and consumer offerings usually provide some protection against cyclical downturns in its more industrial businesses, but 3M struggled due to weakness in consumer electronics and because of geopolitical tensions related to trade.

The Dogs of the Dow have something to prove in 2020

The Dogs of the Dow didn't do well in 2019, as their total return of roughly 19% fell well short of the 25% gains for the broader Dow Jones Industrials. That marked the second year in the past three that the strategy didn't deliver the outperformance that investors have come to expect from the Dogs.

However, there's reason for optimism in 2020. Once again, significant exposure to energy will give the Dogs a chance to shine if oil and natural gas prices rebound from their long slump in the coming year. Moreover, the newer entrants could see recoveries from their respective 2019 declines.

The Dogs of the Dow won't always beat out the overall market. But for those looking for blue chip stocks with healthy levels of dividend income, the Dogs are a great place to look for investment ideas.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.