4 ‘Dogs of the Dow’ Stocks to Consider for 2022

NASDAQ: CSCO | Cisco Systems, Inc. News, Ratings, and Charts

CSCO – The major stock market indices slumped on Monday due to rising fears over the fast-spreading omicron coronavirus variant. Investors should therefore consider the ‘Dogs of the Dow’ investment strategy during this time of market uncertainty. These ‘Dogs of the Dow’ stocks, such as Cisco (CSCO), Amgen (AMGN), International Business Machines (IBM), and Dow (DOW), boast stable dividend returns.

Following extreme market volatility, the major stock market indexes ended in red on Friday and have continued lower today. Investors were worried about the economic impact of the rapid spreading of the omicron coronavirus variant and related restrictions. 

Amid market uncertainty, investors often opt for the ‘Dogs of the Dow’ investing style. This strategy, popularized by Michael B. O’Higgins in 1991, usually picks the top ten highest dividend-yielding stocks from the Dow Jones Industrial Average. According to Barron’s, the ‘Dogs of the Dow’ should perform well next year

So, it could be wise to add quality ‘Dogs of the Dow’ stocks, Cisco Systems, Inc. (CSCO), Amgen Inc. (AMGN), International Business Machines Corporation (IBM), and Dow Inc. (DOW) to your portfolio. 

Cisco Systems, Inc. (CSCO)

CSCO is engaged in designing and selling a range of technology across networking, security, collaboration, applications, and the cloud. The company’s products and technologies include infrastructure platforms, applications, and security. It operates in three geographic segments: America, Europe, the Middle East, and Africa (MEA).

On November 22, 2021, CSCO announced that it had launched a collaboration under its Country Digital Acceleration with Thailand to accelerate digitization and help faster recovery from the pandemic. The CDA program is focused on bringing innovation by providing connected healthcare, smart cities solutions, cybersecurity, and 5G for enterprises. This will likely help expand its reach.

The company began paying dividends in 2011. Over the last three years, CSCO’s dividend payout has grown at a 4.72% CAGR, while its four-year average dividend yield is 2.90%, and its current dividend yield translates to a 2.45% yield. CSCO is expected to pay a quarterly dividend of $0.37 per share on January 26, 2022.

CSCO’s revenue for the fiscal first quarter ended October 30, 2021, increased 8.1% year-over-year to $12.90 billion. The company’s non-GAAP net income increased 8.22% year-over-year to $3.47 billion. Also, its non-GAAP EPS increased 7.9% year-over-year to $0.82.

Analysts expect CSCO’s EPS for fiscal 2023 to increase 7.6% year-over-year to $3.68. Its revenue for fiscal 2022 is expected to increase 5.9% year-over-year to $52.74 billion. In addition, it has surpassed Street EPS estimates in each of the trailing four quarters. The stock has gained 35.1% year-to-date to close Friday’s trading session at $60.46.

CSCO’s POWR Ratings reflect solid prospects. It has an overall rating of B, translating to a Buy according to our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

CSCO has an A grade for Quality and a B grade for Stability. It is ranked #7 out of 55 stocks in the Technology – Communication/Networking industry. To see the other ratings of CSCO for Growth, Value, Momentum, and Sentiment, click here.

Amgen Inc. (AMGN)

AMGN is a biotechnology company that discovers, develops, manufactures, and delivers human therapeutics. It focuses on human therapeutics for treating severe illness in oncology/hematology, cardiovascular disease, and neuroscience. The company’s product portfolio consists of Neulasta, XGEVA, Prolia, and Neupogen.

On November 5, 2021, AMGN announced the groundbreaking of its new biomanufacturing plant in New Albany, Ohio. The plant is set to start operations by 2024. Its final product assembly and packaging plant are expected to support the growing demand for AMGN’s medicines and help it expand its revenues and profits.

Over the last three years, AMGN’s dividend payout has grown at a 10.06% CAGR, while its four-year average dividend yield is 2.77%. Its current dividend yield translates to a 3.49% yield. It has been paying dividends since 2011. AMGN is expected to pay a quarterly dividend of $1.94 per share on March 8, 2022.

For the third quarter ended September 30, 2021, AMGN’s revenue increased 4% year-over-year to $6.70 billion. The company’s non-GAAP net income increased 8% year-over-year to $2.66 billion, while its non-GAAP operating income increased 8% year-over-year to $3.45 billion. Also, its non-GAAP EPS came in at $4.67, up 11% year-over-year.

For the quarter ending March 31, 2022, AMGN’s EPS is expected to increase 12.2% year-over-year to $4.15. Its revenue for fiscal 2022 is expected to increase 4% year-over-year to $27.06 billion. It has surpassed consensus EPS estimates in three of the trailing four quarters. Over the past month, the stock has gained 8.1% to close Friday’s trading session at $222.50.

AMGN’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, equating to a Buy in our proprietary rating system. It has an A grade for Quality and a B grade for Value and Stability.

Within the 473-stock Biotech industry, it is ranked #5. Click here to see the other ratings of AMGN (Growth, Momentum, and Sentiment).

International Business Machines Corporation (IBM)

IBM is a technology company that operates in the cloud and cognitive software; global business services; systems; and global financing segments. It also designs advanced semiconductors in partnership with IBM research.

On December 14, 2021, IBM and Samsung Electronics jointly announced a breakthrough in semiconductor design utilizing a new vertical transistor architecture. This breakthrough could help make mobile batteries last more than a week, and energy usage is likely to decrease. This could lead to increased demand for the solution in the near term.

The company began paying dividends in 1989. Over the last three years, IBM’s dividend payout has grown at a 2.19% CAGR, while its four-year average dividend yield is 4.77%, and its current dividend yield translates to a 5.15% yield. IBM paid a quarterly dividend of $1.64 per share on December 10, 2021.

IBM’s revenue for the fiscal third quarter ended September 30, 2021, increased marginally to $17.61 billion. The company’s cloud and cognitive software segment’s revenue increased 2.5% year-over-year to $5.69 billion. Also, for the period ended September 30, 2021, its long-term debt came in at $46.93 billion compared to $54.36 billion for the period ended December 31, 2020.

Analysts expect IBM’s EPS for the current quarter ending December 31, 2021, to increase 66.2% year-over-year to $3.44. It surpassed Street EPS estimates in each of the trailing four quarters. The stock has gained 7.9% over the past month to close Friday’s trading session at $127.40.

IBM’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, equating to a Buy in our proprietary rating system. It has a B grade for Value and Quality.

In the 51-stock, B-rated Technology – Hardware industry, IBM is ranked #11. To see the other ratings of IBM for Growth, Momentum, and Stability, click here.

Dow Inc. (DOW)

DOW is the holding company for the Dow chemical company and its subsidiaries. The company’s portfolio of plastics, industrial intermediates, coatings, and silicones businesses delivers a range of science-based products and solutions for its customers in various market segments like packaging, infrastructure, mobility, and consumer care.

On October 6, 2021, DOW announced its plan to build the world’s first net-zero carbon emissions integrated ethylene cracker and derivatives site for scope 1 and 2 carbon dioxide emissions. This project will likely triple its ethylene and polyethylene capacity from its existing Alberta site. Also, its current site’s assets would be retrofitted to achieve net-zero carbon emissions. So, this could lead to high EBITDA growth for DOW and help achieve its commitment of reducing up to 30% carbon emissions by 2030.

DOW’s four-year average dividend yield is 4.48%, and its current dividend yield translates to a 5.18% yield. The company began paying dividends in 2019. It paid a quarterly dividend of $0.70 per share on December 10, 2021.

For the fiscal third quarter ended September 30, 2021, DOW’s net sales increased 53% year-over-year to $14.8 billion. The company’s packaging and specialty plastics net sales increased 69.4% year-over-year to $7.73 billion. Its net income came in at $1.70 billion, compared to a loss of $1 million in the year-ago period.

For fiscal 2021, analysts expect DOW’s EPS and revenue to increase 438.6% and 42.2% year-over-year to $8.94 and $54.79 billion, respectively. It surpassed consensus EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 0.5% to close Friday’s trading session at $54.10.

DOW’s strong prospects are reflected in its POWR Ratings. The stock has an overall B rating, equating to a Buy in our proprietary rating system.

It has an A grade for Value and a B grade for Quality. It is ranked #43 out of 89 stocks within the A-rated Chemicals industry. Click here to see the ratings of DOW for Growth, Momentum, Stability, and Sentiment.


CSCO shares were trading at $60.15 per share on Monday afternoon, down $0.31 (-0.51%). Year-to-date, CSCO has gained 38.35%, versus a 22.53% rise in the benchmark S&P 500 index during the same period.


About the Author: Dipanjan Banchur


Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
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AMGNGet RatingGet RatingGet Rating
IBMGet RatingGet RatingGet Rating
DOWGet RatingGet RatingGet Rating

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