Would the Dogs of the Dow investing strategy work for the year's worst performing component stocks of the S&P 500 (Index: SPX)?
We're asking that question because Seeking Alpha's Jason Capul posted an article with the irresistibly clickbait title of "Thanksgiving leftovers no one wants: 10 worst S&P 500 stocks of 2025" just before the Thanksgiving holiday for the U.S. stock market. Now that it's the day after the Thanksgiving holiday, we're wondering if the S&P 500's 'thanksgiving leftovers', the ten stocks that have lost the most value during the year-to-date in 2025, might provide an opportunity to deliver better returns than the S&P 500 itself in the next year.
Which would be cool if it works, but we don't know that it does. Here's how Investopedia describes how the Dogs of the Dow investing strategy works:
The general concept is to allocate money to the 10 highest dividend-yielding, blue-chip stocks among the 30 components of the DJIA. This strategy requires rebalancing at the beginning of each calendar year.
That presents a problem for the 10 worst-performing stocks of the S&P 500, because none of these stocks would be considered blue chip companies and because seven of the ten pay no dividends. Here's the list with stock prices and Year-To-Date (YTD) stock price performance as of 28 November 2025 to make them genuine Thanksgiving leftovers!
- Fiserv (NASDAQ: FISV) - $61.47 (YTD: -70.1%)
- Trade Desk (NASDAQ: TTD) - $39.56 (YTD: -66.3%)
- Deckers Outdoor (NYSE: DECK) - $88.03 (YTD: -56.7%)
- Gartner (NYSE: IT) - $232.74 (YTD: -52.0%)
- Lululemon Athletica (NASDAQ: LULU) - $184.18 (YTD: -51.8%)
- Molina Healthcare (NYSE: MOH) - $148.26 (YTD: -49.1%)
- Alexandria Real Estate Equities (NYSE: ARE) - $53.67 (YTD: -45.0%)
- Chipotle Mexican Grill (NYSE: CMG) - $34.52 (YTD: -42.8%)
- Factset Research Systems (NYSE: FDS) - $277.27 (YTD: -42.3%)
- Dow Inc. (NYSE: DOW) - $23.85 (YTD: -40.6%)
The three firms that pay dividends on this list are Alexandria Real Estate Equities (a real estate investment trust that focuses on pharmaceutical and biotech facilities), Factset Research Systems (a provider of financial data and analysis for financial professionals), and Dow Inc. (a manufacturer of chemicals, with no relation to Dow Jones Industrial Average that puts the "Dow" into the "Dogs of the Dow" investing strategy).
For our Thanksgiving leftovers from the S&P 500, we're going to look two hypothetical investing scenarios. For the first, we'll invest in only the "high-yielding" members of the list of Thanksgiving leftover stocks and compare how that investment performs against the seven other stocks in the list and the S&P 500 as a whole.
For the second hypothetical scenario, we'll invest in the entire list of stocks with the size of the investments weighted by their share of the ten stocks' market capitalizations as of 28 November 2025, and see how that compares against the S&P 500.
We have no idea how any of that is going to turn out. Will reversion to the mean happen for these worst performers giving each a market-beating rate of return? Or will the troubles at the companies that caused their stock prices to plummet so much in the first place keep them falling through the floor? Will the dividend-paying firms or non-dividend paying firms deliver a better performance? Or will the S&P 500 reign supreme over all of the above?
We're excited to find out! We'll nail down the methodology and update the status of how the Thankgiving Leftover stocks are doing about once a month, with the first update coming sometime in January 2026.
Image credit: Turkey sandwich photo by Matthew Moloney on Unsplash.
Labels: ideas, investing, thanksgiving
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