The Dow Jones Industrial Average had one heckuva quarter, had a very nice time of it in the first quarter 0f 2013, running up more than 11% and setting all-time high after all-time high along the way.
The Dow managed to shrug off concerns in Europe — including the latest problems in Cyprus — by focusing on continued strong news in the U.S. housing sector, and of course the Fed’s continued quantitative easing.
At the same time, investors who were looking for yield and income rolled their money into some of the Dow’s defensive stocks, though the index also saw a technology turnaround story of massive proportions.
While it was a nice run for a number of Dow component investors, not everyone shared in the party — some struggled in their own ways, though only two stocks finished the quarter in the red.
Without further adieu, here’s a look back at the best and the worst of the Dow from Q1:
#5 Best: Pfizer
Global pharmaceutical giant Pfizer (NYSE:PFE) enjoys the staying power of products like Viagra, Caduet and Celebrex, not to mention a pipeline of other pharmaceutical products cutting across a wide range of illnesses. Pfizer also completed a spinoff of its animal health division, Zoetis (NYSE:ZTS), raising $2.2 billion in the process.
Bank of America, Jefferies Group and The Street all upped their pricing targets on the stock during the quarter, helping to boost investor interest — not that it needed the help, what with its strong product line and thick 3.3% dividend yield.
#4 Best: Johnson & Johnson
Investors climbed into consumer stocks this past quarter, and that included Johnson & Johnson (NYSE:JNJ). Indeed JNJ’s quarter end included a run into all-time high prices above the $80 mark, though Warren Buffett did roll out of the stock during the quarter.
JNJ’s run is more remarkable considering that it warned FY2013 earnings would be lower than original estimates. Still, the company continues to pump out solid financial results, including a 3.4% year-over-year increase in 2012 revenue, and a nearly 8% higher profit.
Like Pfizer, investors also look to JNJ for its nice quarterly payout, which currently adds up to a 3% annual yield.
#3 Best: Travelers
Insurance titan Travelers (NYSE:TRV) is another stock that has blasted to all-time highs. TRV has managed to (pardon the pun) weather losses from outside forces, such as Hurricane Irene in 2011 and Superstorm Sandy late in 2012. So, instead of coming into 2012 with big losses, TRV managed to turn in strong profits throughout the year.
The company also continued to push out solid dividends, providing investors with a bolstered payout for the eighth consecutive year.
Also, Credit Suisse recently updated its price target for TRV to $95 per share — another 13% upside, at least in one analyst’s opinion.
#2 Best: American Express
The financial services sector has soared so far this year, and American Express (NYSE:AXP) has been right in the middle of the rise, climbing over its all-time highs last set in 2007 over the course of the quarter.
American Express is a major credit card issuer representing $519 billion in purchasing volume. AXP also has introduced products such as a digital wallet to compete with PayPal, and made deals like its Bluebird prepaid card effort with Walmart (NYSE:WMT). Bluebird has been a success so far, with nearly 575,000 accounts opened worth around $275 million.
The company also is looking toward a younger target audience, working with Twitter to allow customers to get discounts by using a specific hashtag in tweets.
#1 Best: Hewlett-Packard
If you had suggested back on Jan. 1 that struggling Hewlett-Packard (NYSE:HPQ) would lead the Dow in Q1 performance — and by a wide margin — investors would’ve pointed and laughed. But you — and Meg Whitman — would’ve had the last guffaw.
HPQ’s share price has soared in 2013, bouncing off the bottom of last year amid a few actions to turn the boat around, such as massive layoffs to save costs and a hike to the dividend. It remains to be seen whether the company’s product lineup will show a similar resurgence, but for now, HPQ shareholders have to be happy to recoup some of their losses.
#5 Worst: UnitedHealth Group
The healthcare segment is undergoing some big changes as the implementation of Obamacare nears, and UnitedHealth (NYSE:UNH) found itself trying to negotiate through a bit of the unknown.
Not helping things is a paltry 1.5% dividend yield, not enough to keep up with inflation and less than you can get from a 10-year T-Note. But the good news on that front is that UNH has rapidly improved its dividend from 3 cents annually just a few years ago to 21 cents quarterly today.
And, of course, once the costs and benefits of the Affordable Care Act become clearer, UNH could begin to look a lot more attractive.
#4 Worst: Bank of America
Financials might have done well in Q1, but Bank of America (NYSE:BAC) has been one of the weakest partiers.
Momentum stalled on fears of contagion in Europe thanks to the bailout crisis in Cyprus. BAC also remains hampered by various legal proceedings stemming from possible mortgage abuses in its Countrywide Financial group, perhaps tamping down investor enthusiasm.
On the financial front, BAC’s fourth-quarter earnings and revenues both headed lower, again thanks to issues on the mortgage front.
But perhaps the spillover is a bit unwarranted, particularly since BAC passed the Fed’s recent stress test with flying colors, and is actively engaged in a stock buyback program to try and maximize shareholder value.
#3 Worst: Exxon Mobil
The sloth factor in Exxon Mobil (NYSE:XOM) shouldn’t come as a big surprise to investors, as the company stock price has lagged for the last five years, delivering a paltry 6% return while the Dow soared nearly 20% over the same period. Of course, economies of scale and sheer size may have much to do with XOM’s performance, as the oil giant’s ship is hard to turn quickly.
Hampering Exxon in the past quarter have been weak oil prices, which have flagged thanks to a strengthening U.S. dollar that has cramped a number of commodities.
While still invested heavily in the oil discovery, production and distribution business, XOM has for years been entrenching itself in natural gas, which has helped diversify its revenue streams. Also, Exxon continues to buy back shares, which should boost EPS, and its 2.5% dividend, while unspectacular, also isn’t anything to sneeze at.
#2 Worst: Alcoa
Pity poor Alcoa (NYSE:AA), one of the world’s top aluminum producers. The company is a virtual slave to global economic conditions in housing, automobiles, construction and infrastructure, and the Chinese government provides subsidies for its product globally, helping to keep the prices down. In fact, aluminum prices have fallen over 7% in the past year, putting pressure on the expense side of the ledger for AA.
There isn’t much in the way of momentum for this stock, which can only hope for more robust economic growth across China, the U.S. and other major nations.
#1 Worst: Caterpillar
Caterpillar (NYSE:CAT), like Alcoa, is dealing with an economically slumping world, leaving the farm and construction equipment manufacturer in wait. Reduced sales, lower inventory and a slower backlog all contributed to CAT’s Q1 slump, despite a record 2012.
The company telegraphed lower revenue numbers for Q1, so at least for now, this year isn’t looking good — at least as long as European, South American and Chinese markets continue to struggle.
Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he was long XOM, VZ and JNJ.