I n the mid-1990s, a strategy called “Dogs of the Dow” became popular. Here’s how it works: At the start of the year, investors following this strategy buy the ten highest-yielding Dow Jones Industrial Average stocks and hold them for a year.

Its popularity waned in the late 1990s as growth investing was all the rage, but with today’s near-zero interest rate environment the strategy is quietly doing well.

The Dogs strategy is based on the concept that investors should own well-established companies with attractive yields.

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Dividends are the key component because yield matters. Over the last seven years the price of the S&P 500 index is up 40 percent. With dividends, however, the index is up 63 percent!

In 2014, the Dogs of the Dow strategy gained 14 percent, which was close to twice the Dow’s return.

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In the last 14 years, the strategy posted a average total return of 8.9 percent, compared to a gain of 7.3 percent for the S&P 500.

Microsoft and Intel were the strongest performers. As a result, they now yield less so these two stocks, along with Cisco Systems, are no longer holdings.

For 2015, they are being replaced by Caterpillar, Exxon Mobil and Coca-Cola.

In descending order of dividend yield, the 2015 Dogs of the Dow are as follows: AT&T (T), Verizon (VZ), Chevron (CVX), McDonald’s (MCD), General Electric (GE), Pfizer (PFE), Merck (MRK), Caterpillar (CAT), Exxon Mobil (XOM) and Coca-Cola (KO).

The Dogs of the Dow strategy limits holdings to Dow stocks because they are all well-established and are unlikely to cut their dividends.

There are many solid companies outside the Dow, however, that increase their dividend payments each year and should be considered.

One of my favorites is Spectra Energy (SE), a pipeline company. Spectra Energy yields 4.2 percent and it plans to raise the dividend by 10 percent in 2015.

Once oil prices stabilize, investors won’t ignore its yield.

David Vomund is an Incline Village-based fee-only money manager. Information is found at http://www.ETFportfolios.net or by calling 775-832-8555. Clients hold the positions mentioned in this article. Past performance does not guarantee future results. Consult your financial adviser before purchasing any security.