Non dow stocks to invest

Another popular play on the Dow is to buy the highest-yielding stocks in the index, a strategy called Dogs of the Dow. Another ETF uses leverage borrowing to provide twice the daily performance of the DJIA, although this is very risky as it also has the possibility of yielding twice the loss. Related Articles. Most of the indices familiar to investors are «market-capitalization-weighted», meaning that the companies with higher valuations have more influence on the index’s movements.

Investing in Dow Companies

Why Zacks? Learn to Be a Better Investor. Forgot Password. The Dow Jones Industrial Average is a well-known stock market index that tracks the stock market performance of 30 major U. All of the companies on the list are publicly traded, meaning their stock is available through a stock brokerage of your choice or sometimes even directly from the companies.

The 30 components of the Dow Jones Industrial Average.

Imagine being on a Ferris wheel: one minute you’re on top of the world, the next you’re at the bottom — and eager to head back up again. Investing in cyclical companies is much the same, except the time it takes to go up and down, known as a business cycle , can last years. Identifying these companies is fairly straightforward. They often exist along industry lines. Automobile manufacturers, airlines, furniture, steel, paper, heavy machinery, hotels, and expensive restaurants are the best examples. Profits and share prices of cyclical companies tend to follow the up and downs of the economy; that’s why they are called cyclicals. When the economy booms, as it did in the go-go ’90s, sales of things like cars, plane tickets, and fine wines tend to thrive.

Which Stocks Are in the Dow?

Note: Total return statistics in the second paragraph were initially misstated — they have been corrected. Had you invested across all 30 active Dow components, in equal weighting, your annualized return would be invewt meager 3. But, if you had you avoided the 10 worst performing Dow stocks, your annual return would nearly double to 5.

As the data shows, diversification is a useful tool — but far more useful for investors that know. However, just because a stock is attractively stlcks does not make it a good investment.

Five of the 10 Dow stocks in our attractively valued list have delivered negative returns over the last decade — in many cases, the result of poor management and corporate governance — not the result of poor performance by the company.

Nevertheless, we shall attempt to select a small portfolio of Dow stocks intended to outperform the collective future performance of the 20 best-performing Dow components. To screen for candidates, all 30 Dow components were held against the following criteria.

The expected rate of return of the equity should exceed the risk-free rate of a Treasury note, preferably, by a. Return on invested capital measures the success and failures of a company’s capital expenditures — a direct measure of managerial competence.

Ten percent is a reasonable minimum figure to no that management is spending capital wisely. For an individual investor, 10 years represents a large percentage of his or her «investable lifetime. Or, as Benjamin Graham writes in. After analyzing the 30 stocks that comprise the Dow Jones Industrial Average, eight issues meet the standards of our established criteria.

It is worth noting that far greater investment opportunities exist outside of the realm of Dow components — applying the above invsst to a greater universe hon stocks inbest yield many positive surprises. Total return data only provided for securities currently listed in the Dow Jones Industrial Average.

Data provided by Yahoo! Finance via BuyUpside. KO — Get Report. Whether or not Coca-Cola can consistently raise its dividend into the future remains to be seen. While Coca-Cola is the least attractively valued stock on our list, investors can take comfort in lnvest.

Warren Buffett. Bill Gates. DD — Get Report. For the last decade, DuPont has delivered positive value to shareholders by offering a sizable dividend, currently yielding 3. However, it should be noted that DuPont sttocks just short of satisfying. If DuPont is unable to maintain a below-average tax rate, or if the company faces an operational adversity, a dividend cut may occur, likely resulting in depressed share prices.

If you’ve ever used an escalator, elevator, or central air conditioner — chances are — you’ve used a. UTX — Get Report. StoclsUnited Technologies stock has appreciated 2. BA — Get Report. Boeing has very weak liquidity.

MMM — Get Report. XOM — Get Report. CVX — Get Report. COP non dow stocks to invest Get Report. OXY — Get Report. Traders may have left Exxon for dead, but investors with a long-term perspective would be wise to use Exxon’s prolonged undervaluation to their advantage.

ExxonMobil is the most attractively valued integrated oil major, and is two to three times more profitable than any company in its competitive set. According to. They have stlcks history of doing that better than anyone. In addition, ExxonMobil’s return on equity nob always the best in the patch and they fo the kind of balance sheet that could lead to a significant stock buyback at any moment.

IBM — Get Report. IBM’s current valuation gives investors a reasonably safe entry point, and the company’s growing cash flows should provide investors with the confidence to buy additional shares in the event of a price decline.

In the opinion of the author, IBM could greatly enhance shareholder value by doubling its current dividend. JNJ — Get Report. Follow johndefeo. Disclosure: TheStreet’s editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks. Real Money. Real Money Pro. Quant Ratings. Retirement Daily. Stocos Stocks. Top Stocks. Real Money Pro Portfolio. Chairman’s Club. Compare All. Cramer’s Blog. Cramer’s Monthly Call. Jim Cramer’s Best Stcks.

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Understanding the Dow Jones Average

Another popular play on the Dow is to buy the highest-yielding stocks in the index, a strategy called Dogs of the Dow. ETFs can contain various investments including stocks, commodities, and bonds. Store Podcasts Log in Search Close. John has been writing about the auto business and investing for over 20 years, and for The Motley Fool since You can purchase shares in each of the 30 companies currently included in the Dow Jones Industrial Average. In recent years, however, there has not been much difference between the two approaches, and I am not a fan. Even so, the adjustments fail to reflect a U. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Store Podcasts Log in. Where is Amazon. After years, has the Dow Jones industrial average finally become obsolete? Blue-Chip Index A blue-chip index seeks to track the performance non dow stocks to invest financially stable, well-established companies that provide investors with consistent returns. The total has grown over time: Initially, the index had just 12 components, representing the major public industrial companies of the day.