From Nasdaq:
The Dow Jones Industrial Average has seen a year-to-date return of 12.8% in 2023. While it has appeal, five stocks in the index should be avoided due to financial weakness and lack of growth prospects, including Verizon and Walgreens. Alternatives like United Parcel Service and Kinder Morgan offer higher yields and better growth potential.
Merck is the weakest healthcare stock in the Dow, with underperforming growth prospects. Instead, Johnson & Johnson, UnitedHealth Group, and Amgen are strong healthcare stocks in the index with better valuations and long-term potential, making them better investment options.
The technology stocks in the Dow, such as IBM and Cisco, are overshadowed by superior alternatives like Apple and Microsoft, which have strong balance sheets, cash flow, and growth prospects. Both Apple and Microsoft are poised to deliver significant shareholder value in the long term.
The Dow index contains many high-quality companies with solid dividends and industry-leading businesses. Stocks like JPMorgan Chase, Visa, Chevron, McDonald’s, Procter & Gamble, and Apple stand out as top picks for their respective sectors, as well as being recession-resistant and iconic brands with long-term potential.
Overall, the Dow is a great place to look for a blend of growth, income, and value in 2024, with relatively better valuations and higher-quality holdings compared to the S&P 500.
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Disclosure: The author has positions in Walt Disney and various options, while The Motley Fool has positions in and recommends Apple, Cisco Systems, and many other companies. The author’s views do not necessarily reflect those of Nasdaq, Inc.
Read more: There Are Only 5 Dow Stocks I Wouldn’t Buy in 2024