Most investors have probably heard of the Dogs of the Dow strategy. Rank the dividend-yielding Dow Jones Industrial Average stocks from highest to lowest yield and buy the top 10. Hold for one year and a day and sell. Then do it all over again.

This strategy was all the rage back in the early 1990s, and for good reason. The strategy had a market-beating track record and only required about an hour per year to pick the stocks. However, the strategy faltered when the market went nuts in the late 1990s, causing investors to lose interest. 

As of Dec. 31, 2009, the Dogs of the Dow strategy has produced annual returns of 9%, 3.2%, and 1.1% over the past 15 years, 10 years, and five years, respectively.

There have been many takes on this strategy: Small Dogs of the Dow, Dow Underdogs, and Dogs of CAPS among others. For a time, the Motley Fool even had a strategy named the Foolish Four, however it was abandoned in 2000 after "more extensive long-term studies completed by our staff show that the strategy hasn't beaten the market by as much as it did in our original 25-year sample. Over the past 50 years, Foolish Four outperformance was less than 2% annually. While still attractive, the approach is suspect in light of the recent changes in the Dow. The addition of non-dividend paying companies and a waning interest in dividend income have caused us to doubt that the strategy will consistently outperform the stock market's average in the future."

Dogs of the S&P 500
With that said, what if we applied this to the S&P 500, an index of 500 stocks compiled by Standard & Poor's that includes "leading companies in leading industries of the U.S. economy, capturing 75% coverage of U.S. equities." While the S&P 500 also has some non-dividend paying stocks, 372 (74.4%) of the companies in the index pay dividends.

Here are the Dogs of the S&P 500:

Company

Dividend Yield (%)

Market Cap (in millions)

Frontier Communications (NYSE: FTR)

                         8.54

$8,709.9

Windstream (Nasdaq: WIN)

                          7.9

$6,116.9

CenturyLink (NYSE: CTL)

                         7.01

$12,473.8

Pitney Bowes (NYSE: PBI)

                         6.65

$4,534.8

FirstEnergy (NYSE: FE)

                         6.06

$11,071.6

Reynolds American

                         6.04

$18,928.8

Verizon Communications (NYSE: VZ)

                          6.0

$91,813.9

Altria Group (NYSE: MO)

                         5.98

$53,067.3

AT&T (NYSE: T)

                         5.89

$168,524.7

R.R. Donnelley & Sons (NYSE: RRD)

                         5.64

$3,806.2

Source: Capital IQ, a division of Standard & Poor's.

I don't advocate mechanical investing, but some of these are definitely worth a further look. For example, Altria was recently singled out as "Probably the World's Greatest Investment" by Fool wunderkind Morgan Housel.

Mechanical investing isn't for everyone. For some dividend opportunities that may better fit your investing style, click here to get The Motley Fool's five-page free report: 13 High-Yielding Stocks to Buy Today.

Dan Dzombak recommends you read The Best Investment Advice You Will Ever Get If You Have Under $100k. His musings and articles he finds interesting can be found on his Twitter: @DanDzombak. He does not own any of the stocks mentioned in this article.

The Fool owns shares of Altria Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.