September Dogs Of The Dow: Identifying the Ultimate 'Safer' Dividend Play

The Dogs of the Dow strategy, a time-tested approach to dividend investing, has long attracted income-focused investors by prioritizing the 10 highest-yielding stocks in the Dow Jones Industrial Average. As of September 2025, this strategy continues to offer compelling opportunities, with stocks like Verizon (VZ), Chevron (CVX), and Merck (MRK) standing out for their attractive yield-to-price ratios. However, the interplay between dividend yields and share prices remains a critical factor in determining which of these stocks qualify as the ultimate “safer” dividend plays.

The 2025 Dogs of the Dow: A Snapshot

The 2025 list features a mix of established blue-chip companies and sector leaders, each offering varying combinations of yield and share price. Verizon (VZ) leads with a robust 6.17% yield and a share price of $43.93, making it one of the most accessible options for income seekers [1]. Chevron (CVX) follows with a 4.29% yield and a higher share price of $159.32, while Merck (MRK) offers a 3.89% yield at $83.21 per share. On the other end of the spectrum, Amgen (AMGN) and McDonald’s (MCD) present lower yields (3.33% and 2.27%, respectively) but significantly higher share prices ($285.61 and $312.22) [1].

This divergence underscores a key challenge for investors: high yields often signal undervaluation or sector-specific pressures, while elevated share prices can deter smaller investors or suggest strong market confidence. The Dogs of the Dow strategy hinges on the premise that high-yielding stocks are temporarily undervalued and likely to rebound, a theory supported by historical data [2].

Yield vs. Share Price: Balancing Risk and Reward

The relationship between dividend yield and share price is inherently inverse: as a stock’s price falls, its yield rises, assuming dividends remain stable. However, this dynamic does not always equate to value. For instance, Verizon’s 6.17% yield appears enticing, but its share price of $43.93 is relatively modest compared to peers like Johnson & Johnson (JNJ) at $175.45 (2.96% yield) or Procter & Gamble (PG) at $155.65 (2.72% yield) [1]. This suggests that Verizon’s high yield may reflect sector-specific headwinds in telecommunications rather than broad-based undervaluation.

Conversely, Chevron’s 4.29% yield at $159.32 strikes a balance between accessibility and sector strength. Energy stocks have faced volatility in 2025 due to geopolitical tensions and shifting ESG priorities, yet Chevron’s yield remains resilient, indicating strong cash flow and a commitment to shareholder returns [1]. Similarly, Merck’s 3.89% yield at $83.21 positions it as a mid-tier option, offering a compelling mix of affordability and healthcare sector stability.

Identifying the Safer Dividend Play

To identify the ultimate “safer” dividend play, investors must weigh yield against fundamentals such as earnings growth, sector outlook, and balance sheet strength. Verizon and Chevron emerge as top contenders. Verizon’s high yield is supported by its dominant position in 5G infrastructure and a history of consistent dividend growth, despite recent debates over its debt load [1]. Chevron, meanwhile, benefits from its exposure to energy transition technologies and a disciplined capital allocation strategy, which have bolstered its yield without compromising long-term growth prospects [1].

Amgen and McDonald’s, while offering lower yields, face challenges. Amgen’s 3.33% yield is modest for a biotech giant, and its $285.61 share price may deter investors seeking immediate income. McDonald’s, with a 2.27% yield and a $312.22 share price, reflects the fast-food sector’s maturity and limited growth potential, making it a less compelling choice for risk-averse investors [1].

Conclusion

The September 2025 Dogs of the Dow highlight the nuanced trade-offs between dividend yield and share price. While high yields like Verizon’s 6.17% and Merck’s 3.89% are attractive, their viability as “safer” plays depends on sector dynamics and financial health. Chevron, with its balanced yield-to-price ratio and energy sector resilience, stands out as a particularly compelling option. For investors prioritizing income stability and moderate growth, a diversified approach that includes both high-yield and mid-yield stocks—such as pairing Verizon with Chevron—may offer the optimal risk-reward profile.

As always, investors should conduct further due diligence, considering macroeconomic trends and company-specific risks before committing capital. The Dogs of the Dow strategy, while historically effective, is not a one-size-fits-all solution.

**Source:[1] 2025 Dogs of the Dow: Daily YTD Performance Tables [https://www.dogsofthedow.com/ddogytd.htm][2] Dogs of the Dow Screen [https://www.aaii.com/stocks/screens/81]