Top 5 Best – And the worst – Dow Jones Stocks in 2021

The Dow Jones index is having a good year. It has already jumped by more than 14% and is hovering near its highest level on record. The index also underperformed the tech-heavy Nasdaq 100 index for a substantial part of the year. This performance is mostly because of the strong corporate earnings, relatively dovish Federal Reserve, and the strong economic recovery. Here are the top-performing Dow Jones stocks YTD.

American Express

Generally, financial companies in the Dow Jones have done well this year as investors hope that tightening will come sooner than expected. American Express stock has been the best performing Dow Jones constituent this year. It has risen by more than 42.70% this year and by about 17.2% in the past three months. 

This performance is because of the strong business fundamentals that support the firm. For example, the company said that its card member spending rose by 11% than in the same period in 2019. The firm also released about $675 million from its reserves. 

Most importantly, analysts expect that the company’s earnings will keep rising when it publishes them tomorrow. They see sales rising by 24.45% and make more than $9.55 billion in revenue. For the year, they see sales rising to more than $39.63 billion.

Goldman Sachs

Goldman Sachs is the second-best performing Dow Jones stock this year. It has risen by 41.3% year-to-date and by more than 76% in the past 12 months. This performance is because of the strong recovery the firm has had as evidenced by the recent quarterly results. Its overall revenue has risen while the diversity of its business has helped it remain stable. 

For example, at the height of the pandemic, the company’s Global Markets division did strongly well. As the division slowed down in the second quarter, its investment banking group did better as the number of IPOs rose. The company also boosted its dividend after performing well in Fed’s stress test. It also reported strong profits after it brought forward some of its last year’s provisions.

Microsoft

The Microsoft stock price has jumped by more than 26.5% this year, becoming the third-best performer in the Dow Jones. The stock has done well because of the strength of its cloud computing business as more firms migrate to the sector. 

This performance was evidenced by the company’s strong quarterly results. The firm said that it made revenue of more than $41.7 billion, an increase of 19%. Its net income was more than $15.5 billion while its operating income rose by 31%. Analysts expect that the firm will shine this quarter even after the Department of Defense (DoD) ended the JEDI contract. The department said that Microsoft and Amazon will likely share the next project.

Home Depot

The Home Depot stock price has risen by more than 22%, becoming the fourth-best Dow Jones stock. The company was among the best performers during the pandemic as more people stayed at home. Consequently, they bought more products to improve their homes. Indeed, the company’s sales rose to more than $132 billion in 2020. It also did well in the past quarter. Still, there are concerns about the high cost of shipping and the overall performance as the economy reopens.

Cisco Systems

The Cisco stock price has risen by 20% this year making it the fifth-best performer in the Dow Jones. The stock did well as demand for its networking products rose as companies prepared to go back to the offices. It was also helped by its cloud products, which include WebEx, one of the leading alternatives to Zoom. 

Other top-performing Dow Jones shares this year are JP Morgan, UnitedHealth Group, Chevron, and Walgreens Boots Alliance. On the other hand, there are only four constituent companies in the red. The worst performers are Merck, Verizon, Walt Disney, and Walmart. 

You can read about the best performing DAX index and FTSE 100 shares here.

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