The table shows the return as of the end of last month for each of the stocks involved in the Dow Dividend strategies shown. These returns are the percent changes from the closing 1995 prices to the closing 1996 prices. The first ten stocks are the ten highest yielding stocks at the end of 1995 sorted by increasing price. The price and yield at the end of 1995 are also shown. Two stocks, Sears and Woolworth, which were on the 1995 BTD5 list, but not on the 1996 list, are shown because they are used in some strategies. The columns of Xs show which stocks are used in which strategies. The return for each strategy is shown at the bottom of the column. For comparison, the returns for the Dow Jones Industrial Average and the S&P 500 are also shown. All returns are price changes only and exclude dividends. With the exception of MF4, the strategy returns are the average return for the stocks in the strategy. This is equivalent to assuming that an equal dollar amount was invested in each stock used for the particular strategy.
The strategies in the table are:
Dec 29, 1995 Change as Used in strategy (indicated by X): Stock Price Yield of12/31/96 BTD5 High10 PPP MF4 LY 2YR
Intl Paper 37.88 2.6% 6.9% X X X Chevron 52.38 3.8% 24.1% X X X XX X X Minn M&M* 66.38 2.8% 29.3% X X X X X East Kodak 67.00 2.4% 19.8% X X X X X DuPont 69.88 3.0% 34.7% X X X X Gen Elec 72.00 2.6% 37.3% X Texaco 78.50 4.1% 25.0% X Morgan JP 80.25 4.0% 21.7% X Exxon 81.13 3.7% 20.8% X Phil Morris 90.25 4.4% 25.2% X
Sears 39.00 2.4% 17.9% X X Woolworth 13.00 0.0% 69.2% X X
Strategy Result as of 12/31/96: 23.0% 24.5% 24.1% 26.4% 32.1% 28.8% [BTD5 High10 PPP MF4 LY 2YR ] DJIA change as of 12/31/96: 26.0% S&P 500 change as of 12/31/96: 20.3% * MMM spun off Imation (IMN) in July. MMM shareholders received 1 Imation share for each 10 MMM shares. The value of MMM used to calculate the percent change above is the price of MMM plus 1/10 of the price of Imation at the end of the month.
For 1996, the strategies incorporating the 1995 BTD5 stocks were the best performers. This was due to the large gain in Woolworth, which was not part of the 1996 only strategies since it eliminated its dividend in 1995. Otherwise, the results were somewhat consistent with the historical results. The PPP and MF4 did better than the BTD5. However, the High10 strategy did better than the BTD5 and PPP, which is contrary to the averages. Note that the returns for the BTD5, High10, and PPP (and MF4) were fairly close. All strategies were ahead of the S&P 500 for the year, but the Dow itself did better than the BTD5, High10 and PPP strategies. International Paper, which was the lowest priced stock in the top ten yields was by far the poorest performer of the 12 stocks shown above. Since the MF4 excludes the lowest priced stock, it benefited by having a second lot of Chevron instead of International Paper.