If You Can Only Buy One Dow Stock in May, It Better Be One of These 3 Names


  • These are a number of Dow stocks that investors should consider adding to their portfolios.
  • Walmart (WMT): strong quarterly results sent its stock prove higher.
  • Caterpillar (CAT): is a leader amongst companies in the Dow that offers a strong dividend yield.
  • American Express (AXP): Millennials, especially Gen Z customers, are rapidly growing into its primary consumer base.
Dow stocks to buy - If You Can Only Buy One Dow Stock in May, It Better Be One of These 3 Names

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The Dow Jones Industrial Average comprises 30 blue-chip stocks that most investors are familiar with. It’s an index that investors use to gauge the position of the stock market as a whole, similar to the Nasdaq and S&P 500.

The Dow has risen by 18% over this past year; earlier last week, it reached 40,000 for the first time.

The Dow’s rise to 40,000 was mostly due to the stocks I mentioned below. These companies have all performed very well this year due to impressive earnings, business expansion and growing customer bases. Investors should strongly consider investing in these very solid companies.

Walmart (WMT)

A photo of the Walmart (WMT) logo on the side of a truck.
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Walmart (NYSE:WMT) is a retail chain with domestic and international locations. It offers various goods, including consumer staples, furniture, electronics, housewares, seasonal items, appliances and office supplies. It also operates Sam’s Club, a membership-driven warehouse club.

Over the past year, Walmart’s share price has increased by 33%, reaching a new all-time high following its most recent earnings report, which beat analysts’ expectations.

On May 16, Walmart reported earnings for the first quarter of the fiscal year 2025, stating that total revenue increased by 6%, and its earnings per share tripled to sixty-three cents per share compared to the previous year. Its global eCommerce sales rose by 21% year-over-year, and its advertising business increased by 24% compared to last year.

Walmart raised its outlook for the second quarter of FY 2025. It expects net sales to increase between 3.5% and 4.5%. Since its most recent earnings report, WMT stock has been up 9%.

Walmart has announced that it will open or convert approximately 150 store locations within the next five years. Its new customer analytics platform, Luminate, will be rolling out among various Walmart locations in Mexico and Canada.

Walmart is a strong Dow stock that has helped lead the index to new heights. The company has beat earnings expectations and is planning to open new store locations, which is exciting for investors.

Caterpillar (CAT)

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Caterpillar (NYSE:CAT) manufactures and sells construction equipment and heavy machinery. Its products include forestry machines, excavators, backhoes, tractors, hard rock vehicles, articulated trucks and diesel-electric locomotives.

Over this past year, its share price has risen by 66%, making it one of the top leaders in the Dow recently.

On Apr. 25, Caterpillar reported earnings for the first quarter of 2024, stating that total revenue remained practically unchanged compared to the previous year. Earnings per share for the first quarter increased from three dollars and seventy-four cents to five and seventy-five cents year-over-year.

CAT also announced that in the first quarter of 2024, it repurchased approximately $4.5 billion in total shares.

Caterpillar offers a strong dividend yield of 1.49% on an annual basis. The most recent distribution to investors was one dollar and thirty cents per share, paid out on May 20.

Caterpillar is a strong Dow stock buy due to solid earnings results, an impressive number of share buybacks, and share price appreciation. Investors are overall excited about CAT’s growth trajectory as one of the Dow leaders.

American Express (AXP)

the American Express logo etched into wood
Source: First Class Photography / Shutterstock.com

American Express (NYSE:AXP) is a consumer finance company that operates an integrated payment system domestically and internationally. AXP offers businesses and customers credit cards, charge cards, and other similar financial products.

On April 19, American Express reported earnings for the first quarter of 2024, stating that total revenue increased by 11% and net income rose by 34%. The press release also mentioned that 60% of new customers are Gen Z and Millennials.

Since the first quarter earnings report, in which it beat analyst expectations, AXP’s stock has risen by 10%. American Express also gained approximately 3.4 million new cards during the first quarter. It reiterated its guidance for the remainder of 2024, in which it anticipates revenue growth to be between 9% and 11%.

American Express is a must-buy for investors seeking exposure to stocks within the Dow. Due to its impressive returns over this past year of 58%, AXP is one of its top performers. Being one of its top performers, AXP offers upside potential regarding earnings. AXP’s growing customer base is of a younger generation, and its growth hinges upon whether AXP can continue to bring in and retain its new customers.

As of this writing, Noah Bolton did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Noah has about a year of freelance writing experience. He’s worked with Investopedia dealing with topics such as the stock market and financial news.

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