The top Dow stocks serve as a bellwether for the health of the U.S. economy. This year, the Dow has trailed the other two major U.S. indices with a 1% gain. Meanwhile, the tech-heavy NASDAQ gained 25% year to date, as the S&P 500 index shot up about 11%. While the rally has not yet favored the more mature and established blue-chip stocks that comprise the 30 names in the Dow, that could soon change. So, we wanted to take a quick look at the very Dow stocks to strongly consider.
Dow Stocks: Apple (AAPL)
Things are looking up at Apple (NASDAQ:AAPL) with the recent launch of the new iPhone 15. Reviews of the new smartphone have been largely positive and sales are reported to be brisk, even in China where there had been concerns the government was banning the devices. This is all welcomed news at Apple after its most recent earnings reports indicated a slowdown in sales of its electronic devices. Looking ahead, Apple has a big catalyst ahead with the 2024 launch of its Vision Pro augmented reality headset. Reviews of the Vision Pro, which will retail at $3,500, have also been strong. The Vision Pro is the first entirely new consumer product from Apple in more than a decade. The stock is up 37% year to date, with further gains likely.
Walt Disney Co. (DIS)
Analysts at JPMorgan Chase (NYSE:JPM) say Walt Disney Co. (NYSE:DIS) could climb 50% higher from current levels. The bullish call came days after Disney announced plans to double the amount it invests in its theme parks and on reports DIS is planning to sell its legacy media properties for as much as $10 billion.
Disney executives said they plan to spend nearly $60 billion to update and expand their theme parks and cruise lines. The theme parks generated $32 billion over the last 12 months, making them one of the top revenue streams for the Mouse House. At the same time, Disney is rumored to be considering a sale of its ABC network and affiliates that could earn it as much as $10 billion. No deal has been announced just yet. Disney is also reported to be considering the sale of specialty sports network ESPN, which could earn it more than $50 billion. DIS stock has declined 10% this year and is down 32% over five years. But a comeback looks to be in the works.
Dow Stocks: Chevron (CVX)
Chevron (NYSE:CVX) should benefit from oil at $95 a barrel, and from forecasts for $100 a barrel. In addition, the company announced record profits in 2022 after crude oil peaked at $122 per barrel. The great news for investors is that CVX stock looks to be on sale right now even with oil prices moving higher. Year to date, Chevron’s share price is down 2% and currently trading 10% below its 52-week high. The stock is also trading at a price-to-earnings (P/E) ratio of 10, which is low compared to other stocks in the S&P 500 index. Better, CVX offers a quarterly dividend of $1.51 per share.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) got a big break after UK regulators said they would likely approve its $68 billion acquisition of Activision Blizzard (NASDAQ:ATVI). All of which should remove a big cloud of uncertainty that had been hanging over the tech giant.
Microsoft also continues to be a major player in the artificial intelligence (AI) space thanks to its $10 billion investment in ChatGPT creator OpenAI. Microsoft has integrated generative AI into its Bing search engine and is developing new applications for the technology across its suite of products that range from cloud storage to video games. AI can be expected to remain a big catalyst for Microsoft going forward. MSFT stock is up 30% year to date.
Goldman Sachs (GS)
Goldman Sachs (NYSE:GS) is reportedly near a deal to sell its consumer banking unit GreenSky. According to multiple reports, Goldman Sachs is in talks with a group of investors that include the firms Sixth Street (NYSE:TSLX) and KKR (NYSE:KKR) to sell GreenSky, which specializes in lending money to consumers for home improvement projects and offers deposit accounts and personal loans.
The sale of GreenSky comes as Goldman Sachs abandons its plans to become a major player in consumer banking. Efforts aimed at providing consumers with deposit accounts and credit cards proved less successful than executives had hoped, dragging down the stock as a result. Goldman Sachs CEO David Solomon has said that the investment bank plans to focus on its traditional strengths of deals and trading as the market for initial public offerings (IPOs) begins to return. GS stock has risen 11% over the last 12 months.
McDonald’s (MCD)
McDonald’s (NYSE:MCD) future earnings should be positively impacted by news it plans to raise the royalty fee it charges on new U.S. restaurant franchisees. At the moment, the company is considering raising the fee to 5% from 4% as of Jan, 1 next year. McDonald’s currently operates more than 13,000 restaurants in the U.S., with 95% of those locations run by franchisees.
McDonald’s has said that the increased royalty fee will help it to maintain its “competitive edge.” It should also provide a boost to the company’s revenues, which already top $23 billion a year. News of the royalty fee increase comes after McDonald’s executives said they expect global sales to moderate in the second half of 2023 and leading into 2024 as consumer spending slows. Still, the company managed to beat Wall Street expectations for its second-quarter financial results.
MCD stock is flat on the year (down less than 1%).
Intel (INTC)
Shares of Intel (NASDAQ:INTC) are recovering after it returned to profitability following two consecutive quarters of heavy financial losses. INTC stock is now up nearly 30% this year and has rallied 18% in the last six months. The move higher comes after Intel reported earnings per share of 13 cents compared to a loss of 3 cents that had been expected on Wall Street.
Intel has also provided strong guidance for the current third quarter, saying it expects earnings of 20 cents a share on revenue of $13.4 billion. That compares to consensus expectations for 16 cents a share on $13.23 billion in revenue. The company is also ramping up its cost-cutting initiatives as it shifts its business to become a microchip and semiconductor foundry rather than a chip designer. INTC stock is still down more than 25% over five years but looks to be on an upswing now.
On the date of publication, Joel Baglole held long positions in AAPL, DIS, and MSFT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
