The Dow Jones Industrial Average, commonly referred to as Dow or DJIA, is a price-weighted stock index composed of the 30 largest US blue-chip companies. The index covers all sectors of the industry, with the exception of transportation and utilities. The Dow uses a divisor-based method to calculate the value of the index based on the prices of its constituent stocks. Microsoft Corp. (MSFT), Apple Inc. (AAPL), Johnson & Johnson (JNJ), JPMorgan Chase & Co. (JPM), and Exxon Mobil Corp. (XOM) are the most popular companies of the Dow Jones market capitalization index in mid-December 2018.
Based on historical data, the DJIA generated an average annual return of approximately 7.75% from 1921 to 2017, with no adjustment for inflation or dividends. However, during the year 2018, DJIA's annual return was negative and was approximately (-4.96) per cent between January 2, 2018 and December 17, 2018. The index hovers around 23,593 in mid-December. In the previous year (2017), the index had a positive annual gain of about 25%. According to various forecasts, the DJIA index should be negotiated between 22,600 and 23,900 over the next year.
The following stocks were the most performing stocks of the Dow Jones index during the year 2018. The list is presented in the order of cumulative performance of the year according to the opening price on January 2, 2018 and closing price on December 17, 2018.
1. Merck & Co., Inc. (MRK)
Market capitalization: $ 195.63 billion
Performance against the DJIA: + 34%
2 Microsoft Corp. (MSFT)
Market capitalization: $ 789.94 billion
Performance against the DJIA: + 19.75%
3 Pfizer Inc. (PFE)
Market capitalization: $ 250.04 billion
Performance against the DJIA: + 18.03%
4 UnitedHealth Group Inc. (UNH)
Market capitalization: $ 248.27 billion
Performance against the DJIA: + 16.7%
5 Cisco Systems, Inc. (CSCO)
Market capitalization: 198.72 billion dollars
Price Change: CSCO earned $ 5.34
Performance against the DJIA: + 13.75%
Merck & Co., Inc. (MRK)
Merck & Co., Inc. (MRK), the leading drug manufacturer based in Kenilworth, New Jersey, has proven to be the best-performing Dow Jones index for the world. year 2018 with annual returns of 34%. The title began to gain momentum beginning in April after an unstable first quarter. In June, Keytruda, the most effective anti-cancer immunotherapy drug, was approved by the FDA for the treatment of two new indications. Its other anticancer products, Lynparza and Lenvima, also contributed to strong sales throughout the year. The Merck vaccine portfolio also generated strong sales with a 13% increase in the third quarter. The HPV vaccine, Gardasil, was launched in China, allowing Merck to expand into new markets. Januvia and Janumet, the subsidiary specializing in the treatment of diabetes at Merck, also supported their financial results with stable sales during the year. The company has successfully surpassed the street estimates of earnings and second and third quarter revenues, allowing the company's stock price to progress steadily.
Microsoft Corp. (MSFT)
After a rough run in the first quarter of 2018, the title of Microsoft Corp. (MSFT), a major technology player based in Redmond, Wash., Began its bullish move in April after the company outperformed earnings and revenue forecasts and provided better-than-expected forecasts for the upcoming quarters. The company has been able to consistently exceed the expectations of the street with respect to the two quarterly results announced in July and October, which has allowed the title to maintain its momentum on the rise. The increase in revenue is due to the strong growth of Microsoft's commercial cloud, which includes the Azure platform. The 19% jump in Microsoft's productivity and business process revenue, which includes Microsoft, Dynamics, and LinkedIn, also helped its financial results in the third quarter. Backed by strong sales growth from a low single-digit figure in fiscal 2017 to nearly 20% at the beginning of fiscal 2019, the stock price reached its highest level in 52 weeks in early October. The technology leader remains a strong buy with a long-term vision.
Pfizer, Inc. (PFE)
Struck by stagnant revenues over the past two years, the year 2018 has not been different for the leading drug maker Pfizer, Inc. (PFE). With a $ 12 billion buyback program, no major merger or acquisition announcement, and a healthy dividend, indicate the company is distributing cash to its shareholders and not exploring new businesses. However, a 31% increase in sales of Xeljanz anti-inflammatory tablets and a 24% increase in Inance sales in the first three quarters of 2018 enabled the company to maintain its revenues. The course of action has been boosted by the recent expansion of Xeljanz, which allows its use for the treatment of ulcerative colitis in the United States and in the European Union, and by the launch of Ibrance on the new European and Japanese markets. Extending Xtandi's label to treat several types of prostate cancer could make it a high-income drug for Pfizer in the future. The recent FDA approval of the anti-cancer drug Talzenna is also expected to contribute to Pfizer's profits.
These positive developments helped the leading drug manufacturer to reach third place with an annual return of about 18%.
UnitedHealth Group, Inc. (UNH)
UnitedHealth Group, Inc. (UNH), an insurance and health services giant based in Minnetonka, Minnesota, has maintained a consistent record for better-than-expected revenue and earnings announcements for the first three quarters The constant financial results, together with an improvement The earnings outlook for the full year 2018 has allowed to rise sharply, generating returns of 17% in 2018. The products were supported by Increasing sales of the company's most expensive plans covering serious health problems. Financial services benefited from the growth of the Optum business, which provides pharmaceutical and technology benefits management services to health insurers and medical providers. At an investor conference held in late November, the company announced it had crossed the '50 million mark of people covered by its personal protection product, announced the conclusion of a agreement for the purchase of a medical group in Seattle and praised its partnership with start-up Bind Benefits, based in Minneapolis. Inc. "The company has also benefited from a 35% to 21% corporate tax rate reduction and technology-related investments to reduce customer costs.
Cisco Systems, Inc. (CSCO)
Cisco Systems, Inc. (CSCO) ranks fifth among the best performing Dow Jones stocks with an annual return of about 14%, but the communications equipment manufacturer based in San Jose, California, struggled . During the first half of the year, which has generated returns of about 12% since the beginning of the year, the stock has recorded gains based on better than expected profits from the first two years of the year. quarters, on the positive sentiment generated by technology companies and the 2017 law on the reduction of employment and employment. The company continues to transform its business model, along with its intention to move from a single sales model to one that generates more recurring revenue streams. It diversifies its offerings to meet the ever-changing needs of the cloud and network services sector, while maintaining the router and switching hardware that has generated revenue.
Evolution of the price of the best winners of the DJIA index
Disclaimer: At the time of writing this article, the author holds no position on the actions mentioned in the article.