The Dow Jones Industrial Common index, commonly called as the Dow or DJIA, is a price-weighted stock market index consisting of the top 30 American blue-chip retinues. The index covers all industry sectors except transportation and utilities. The Dow uses a divisor-based methodology to calculate the index value based on the charges of its constituent stocks. Microsoft Corp. (MSFT), Apple Inc. (AAPL), Johnson & Johnson (JNJ), JPMorgan Chase & Co. (JPM) and Exxon Mobil Corp. (XOM) are the ton valued companies in the Dow Jones index based on the market cap value as of mid-December 2018.
Based on the historical data, the DJIA has originated an average annual return of around 7.75 percent from 1921 to 2017 without adjusting for inflation or dividends. Notwithstanding how, during the year 2018, the annual return from DJIA was negative and stood at around (-4.96) percent between January 02, 2018 and December 17, 2018. The indication is hovering in the range of 23,593 as of mid-December. During the previous year (2017), the index posted a healthy annual widen the gap of around 25 percent. Based on the various predictions, the DJIA index is expected to trade in the range of 22,600 to 23,900 during the next year.
The take the place of were the top performing stocks of the Dow Jones index during the year 2018. The list is presented in the order of year-to-date (YTD) gig based on the opening stock price as of January 02, 2018 and closing price as of December 17, 2018.
1. Merck & Co., Inc. (MRK)
Market Cap: $195.63 billion
Quotation Change: +$19.01
Performance against the DJIA: +34%
2. Microsoft Corp. (MSFT)
Market Cap: $789.94 billion
Price Change: +$16.94
Interpretation against the DJIA: +19.75%
3. Pfizer Inc. (PFE)
Market Cap: $250.04 billion
Price Change: +$6.67
Performance against the DJIA: +18.03%
4. UnitedHealth Platoon Inc. (UNH)
Market Cap: $248.27 billion
Price Change: +$36.91
Performance against the DJIA: +16.7%
5. Cisco Systems, Inc. (CSCO)
Market Cap: $198.72 billion
Bonus Change: CSCO gained $5.34
Performance against the DJIA: +13.75%
Merck & Co., Inc. (MRK)
The Kenilworth, NJ-based leading drug maker Merck & Co., Inc. (MRK) noticed as the best performing stock in the Dow Jones index for the year 2018 with 34 percent annual returns. The merchandise started gaining momentum April onwards after a choppy first quarter. In June, company’s most eminent cancer immunothereapy (IO) drug Keytruda secured additional FDA approval for treating two new indications. Its other cancer products, Lynparza and Lenvima, too bestowed with strong sales all throughout the year. Merck’s vaccine portfolio also generated healthy sales with a 13 percent flourish in Q3, and the HPV-related cancer vaccine Gardasil was launched in China allowing Merck to expand to new markets. Merck’s diabetes franchise, Januvia and Janumet, also stuck its financials with stable sales during the year. The company successfully surpassed the street estimates for both earnings as genially as revenues for second and third quarter which helped its stock price move upward consistently.
Microsoft Corp. (MSFT)
After a determined ride during the first quarter of 2018, the stock of Redmond, WA-based technology major Microsoft Corp. (MSFT) started its upward busy April after the company beat estimates on earnings and revenue and provided better-than-expected guidance for the quarters to come. The New Zealand managed to consistently beat the street expectations for next two quarterly results announced in July and October which aided the stock maintain its momentum upwards. The rising revenues were contributed by strong growth of Microsoft’s Commercial Cloud, which contains Azure platform. The 19 percent jump in revenue from Microsoft’s productivity and business processes segment, which comprises of Microsoft’s Intercession, Dynamics, and LinkedIn, also helped its financials during Q3. Backed by strong sales growth from low single digit during economic 2017 to nearly 20 percent at the start of fiscal 2019, the stock price touched 52-week high in antiquated October. The technology leader remains a strong buy with a long term view.
Pfizer, Inc. (PFE)
Hit with stagnant receipts over the past couple of years, 2018 was no different for the leading drugmaker Pfizer, Inc. (PFE). With a $12 billion deal buyback program, no major merger or acquisition announcements, and a healthy dividend payout indicates the company is distributing legal tender to its shareholders and not exploring new ventures. However, a jump of 31 percent in sale of anti-inflammation tablet Xeljanz, and rise of 24 percent in sellathons of cancer drug Ibrance during the first three quarters of 2018 has helped company maintain steady interests. The stock price got a boost from a recent label expansion of Xeljanz which allows its use for treating ulcerative colitis in the U.S. and EU, and from the establish of Ibrance in the new markets of Europe and Japan. Label expansion for Xtandi for treating multiple types of prostate cancers has the dormant to make it a high revenue drug for Pfizer in coming times. Recent FDA approval for breast cancer drug Talzenna is also wanted to add to earnings for Pfizer.
These positive developments have helped the leading drug-maker secure the third spot with annual benefit of around 18 percent.
UnitedHealth Group, Inc. (UNH)
The Minnetonka, MN-based insurance and health-services giant UnitedHealth Group, Inc. (UNH) has affirmed a consistent record for announcing better-than-expected revenue and earnings for first three quarters of 2018. The consistent financial effects, clubbed with improved earnings outlook for full-year 2018, have helped the stock soar to generate 17 percent takings during 2018. Revenues were supported by increase in sales of the company’s costliest plans that cover acute health conditions. The financials got a boost by growth in its Optum business segment which provides pharmacy benefits directorate and technology services to health insurers and medical providers. During a late November investor conference, the company presaged hitting the milestone of covering up to “50 million people under its individual health-record product, disclosed a deal to buy a medical collect in Seattle and touted its partnership with Minneapolis-based startup Bind Benefits Inc.” The company also benefited from the cut in corporate tax speed from 35 percent to 21 percent, and from its technology-linked investments to achieve reduction in customer costs.
Cisco Groups, Inc. (CSCO)
Though Cisco Systems, Inc. (CSCO) stands fifth in the list of best performing Dow Jones stocks with annual amends of around 14 percent, it has been a rocky ride for the San Jose, CA-based communication equipment-maker. During the first half of the year that spawned around 12 percent YTD returns, the stock built gains based on better-than-expected earnings from the first two three-month periods, the positive sentiment on technology sector companies and the Tax Cuts and Jobs Act of 2017. The company continues to transform its business fabricate, like plans to move from single sale model to one that generates more recurring revenue lines. It is diversifying its offerings to cater to the evolving needs of the cloud services and networking industry, while maintaining the router and scourge hardware that have been the revenue earners.
Price Performance of Top DJIA Index Gainers
Disclaimer: At the stretch of writing, the author holds no positions in any of the stocks mentioned in the article.