Continuing with the theme of the attractiveness of large cap stocks versus their smaller cap cousins, Jim Callahan at Morningstar.com, reviews the attractiveness of the current “Dogs of the Dow” and finds them quite attractive.

Finally, to sum up the attractiveness of these large-cap names, we’ve taken our fair value estimates and each company’s cost of capital to calculate a three-year expected return. (In our opinion, three years is a reasonable time horizon for investing in stocks.) The 2005 Dogs of the Dow portfolio, due in part to its year-to-date 13% decline, is expected to generate a 19% average annual return over the next three years. This expected return has jumped from 11% back in January and is well above the strategy’s historical performance. Further, the amount of return generated by dividends should remain high, given the portfolio’s 8% average dividend growth over the last five years.

The Internet is rife with information on the Dogs of the Dow, but this is a logical starting point.