The 5 Best Performing Dow Jones Stocks of 2021

The Dow Jones Industrial Average (DJIA) gained 18.7% in 2021. Decreasing concerns over the omicron coronavirus variant and ‘January effect’ drove the Dow Jones to close at a record high of $36,799.65 yesterday. The price-weighted index outperformed the Nasdaq 100 and S&P 500 indexes, which fell slightly amid pressure from higher bond yields.

Out of 30 blue-chip stocks in Dow Jones Index, Microsoft Corporation (MSFT), UnitedHealth Group Incorporated (UNH), The Home Depot, Inc. (HD), Cisco Systems, Inc. (CSCO), and The Goldman Sachs Group, Inc. (GS) emerged as the best-performing stocks in the index of 2021. Let’s discuss these stocks in detail.

Microsoft Corporation (MSFT)

MSFT develops, supports, licenses, and sells various software products, services, and solutions worldwide. The Redmond, Wash.-based company also manufactures and sells PCs, tablets, gaming and entertainment consoles, other intelligent devices, and related accessories through OEMs, distributors, resellers, digital marketplaces, and retail stores.

On December 2, 2021, MSFT and CVS Health (CVS), a healthcare company, announced a new strategic alliance focused on developing innovative solutions to provide quality care to consumers while empowering CVS employees with better tools. In addition, MSFT’s Azure will play a key role in CVS’ acceleration of its digital transformation by expanding its already formidable multi-cloud presence to new and existing business applications in the Azure cloud. Both are looking forward to a long-term partnership.

For its fiscal 2022 first quarter, ended September 30, 2021, MSFT’s net revenues increased 22% year-over-year to $45.32 billion. The company’s gross profit came in at $31.67 billion, representing a 21.1% rise from the prior-year period. MSFT’s operating income came in at $20.24 billion, up 275% from the year-ago period. While its net income increased 47.6% year-over-year to $20.51 billion, its EPS increased 48.9% to $2.71. As of September 30, 2021, the company had $19.17 billion in cash and cash equivalents.

Analysts expect the company’s EPS to increase 14.4% year-over-year to $9.21 in the fiscal year 2022, ending June 30, 2022. The consensus revenue estimate of $196.97 billion for the same fiscal year represents a 17.2% rise from the prior-year period. In addition, it surpassed Street EPS estimates in each of the trailing four quarters. MSFT’s EPS is expected to grow at a 16.5% rate per annum over the next five years. The stock has gained 51.1% over the past year and closed yesterday’s trading session at $329.01.

MSFT’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

The stock has an A grade for Sentiment and a B grade for Stability and Quality. Click here to see the additional ratings for MSFT’s Growth, Value, and Momentum. MSFT is ranked #14 of 168 stocks in the Software - Application industry.

UnitedHealth Group Incorporated (UNH)

UNH is a diversified health care and insurance company that offers a broad spectrum of products and services through UnitedHealthcare and Optum platforms. The company provides employers with products and resources to plan and administer employee benefit programs.

On December 1, 2021, UNH introduced a new health plan that offers personalized and seamless customer support and the opportunity to save up to 15% on premiums to consumers in Southwest Arizona. By providing access to quality, affordable, patient-focused health care for people with employer-sponsored health coverage, UNH expects to witness high enrolment in this plan in the coming months.

UNH’s revenues for its fiscal 2021 third quarter ended September 30, 2021, increased 11.9% year-over-year to $72.34 billion. The company’s earnings from operations came in at $5.71 billion for the quarter, representing a 22.8% year-over-year improvement. UNH’s adjusted net earnings were $4.32 billion, up 27.8% from their year-ago period. Its adjusted EPS increased 28.8% year-over-year to $4.52. The company had $21.09 billion in cash and cash equivalents as of September 30, 2021.

The consensus EPS estimate of $18.85 for the fiscal year 2021 ended December 31, 2021, represents an 11.7% rise from the prior-year period. It surpassed the consensus EPS estimates in each of the trailing four quarters. Analysts expect UNH’s revenue to rise 11.4% year-over-year to $286.55 billion in the same fiscal year. UNH’s EPS is expected to grow at a rate of 14.2% per annum over the next five years. Over the past year, the stock has gained 40.5% and ended yesterday’s trading session at $490.90.

It is no surprise that UNH has an overall A rating, which equates to Strong Buy in our POWR Ratings system. The stock has a B grade for Quality, Growth, Sentiment, and Stability. Click here to see the additional ratings for UNH (Value and Momentum).

The stock is ranked #2 of 12 stocks in the B-rated Medical - Health Insurance industry.

The Home Depot, Inc. (HD)

HD operates as a home improvement retailer that sells various building materials, home improvement products, decor products, lawn and garden products; and provides installation, tool and equipment rental, and home maintenance services. The company sells its products through brick-and-mortar stores and online; it serves do-it-yourself (DIY) and Professional Customers.

On October 6, 2021, HD teamed up with popular retailer Walmart Inc. (WMT) to expand home improvement customers’ same-day and next-day delivery capabilities. With WMT’s Walmart GoLocal, HD is looking forward to making fast and reliable local delivery available in both rural and suburban areas for the same-day or next-day and providing the most convenient shopping experience.

HD’s net sales for its fiscal 2021 third quarter, ended October 31, 2021, increased 9.8% year-over-year to $36.82 billion. The company’s gross profit came in at $12.56 billion, indicating a 9.7% year-over-year improvement. Its operating income came in at $5.80 billion, up 19.4% from the prior-year period. HD’s net earnings came in at $4.13 billion for the quarter, representing a 20.3% rise from its year-ago period. Its EPS increased 23.3% year-over-year to $3.92. The company had $5.07 billion in cash and equivalents as of October 31, 2021.

Analysts expect the company’s EPS to be $15.46 for the fiscal year 2022, ending January 31, 2022, representing a 29.5% rise from the prior-year period. It surpassed Street EPS estimates in each of the trailing four quarters, which is impressive. The consensus revenue estimate of $150.18 billion for the same fiscal year indicates a 13.7% year-over-year improvement. HD’s EPS is expected to grow at a rate of 13.7% per annum over the next five years. The stock has gained 56.4% over the past year and closed yesterday’s trading session at $412.84.

HD’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The stock has a B grade for Sentiment and Quality. Click here to see the additional ratings for HD’s Momentum, Stability, Growth, and Value. HD is ranked #23 of 61 stocks in the B-rated Home Improvement & Goods industry.

Cisco Systems, Inc. (CSCO)

CSCO designs and manufactures Internet Protocol (IP) based networking products and services related to communications and information technology worldwide. The company sells its products and services directly and through systems integrators, service providers, resellers, and distributors.

On December 1, 2021, Datagroup, a leading Ukrainian telecom operator for business and home users, announced it is building a secure and reliable high-speed data transmission network with CSCO’s Cisco Routed Optical Networking and Converged SDN Transport architecture solutions. This architecture will help Datagroup deploy one of the most flexible, automated, and efficient networks in the Ukrainian telecom market, integrate open data models and standard APIs, and simplify the commissioning of new services. The two companies are looking forward to a long-term partnership with each other.

CSCO’s total revenue for its fiscal 2022 first quarter, ended October 30, 2021, increased 8.1% year-over-year to $12.90 billion. The company’s non-GAAP gross profit came in at $8.32 billion, representing a 6% rise from the prior-year period. CSCO’s non-GAAP operating income came in at $4.29 billion, up 10% from the prior-year period. While its non-GAAP net income increased 8.2% year-over-year to $3.48 billion, its non-GAAP EPS increased 7.9% to $0.82. The company had $7.62 billion in cash and cash equivalents as of October 30, 2021.

The consensus EPS estimate of $3.42 for the fiscal year 2022 ending July 31, 2022, represents a 6.2% rise from the prior-year period. For the same fiscal year, analysts expect CSCO’s revenue to improve 5.9% from the prior-year period to $52.74 billion. It surpassed Street’s EPS estimates in each of the trailing four quarters. The company’s EPS is expected to grow at a 6.6% rate per annum over the next five years. Over the past year, the stock has gained 39.3% and closed yesterday’s trading session at $61.25.

CSCO’s POWR Ratings reflect its solid prospects. The stock has an overall B rating, which equates to Buy in our proprietary rating system. CSCO has an A grade for Quality, and a B grade for Stability. In addition to the POWR Ratings grades we have just highlighted, one can see the ratings for CSCO’s Growth, Value, Momentum, and Sentiment here. CSCO is ranked #6 of 55 stocks in the C-rated Technology - Communication/Networking industry.

The Goldman Sachs Group, Inc. (GS)

GS is a financial institution that provides a range of financial services for corporations, financial institutions, governments, and individuals worldwide. The company operates through four segments: Investment Banking; Global Markets; Asset Management; and Consumer & Wealth Management.

On November 30, 2021, GS launched Goldman Sachs Financial Cloud for Data with Amazon, Inc.’s (AMZN) Amazon Web Services, Inc. (AWS), a new suite of cloud-based data and analytics solutions for financial institutions. This collaboration helps clients organize and analyze data in the cloud, thereby gaining rapid insights and driving informed investment decisions. Both are looking forward to a long-term partnership with each other.

GS’ total net revenue for its fiscal 2021 third quarter, ended September 30, 2021, increased 26.2% year-over-year to $13.61 billion. The company’s pre-tax earnings came in at $6.84 billion, up 59.2% from the prior year. Its net earnings came in at $5.38 billion, indicating a 59.7% rise from the prior-year period. Its EPS increased 66.3% year-over-year to $14.93. The company had $212 billion in cash and equivalents as of September 30, 2021.

Analysts expect the consensus EPS estimate for the fiscal year 2021 ended December 31, 2021, to be $59.82, representing a 141.8% rise from the prior-year period. The consensus revenue estimate of $58.40 billion for the same fiscal year indicates a 31.1% year-over-year improvement. Analysts expect the company’s EPS to grow at an 18.1% rate per annum over the next five years. Over the past year, the stock has gained 53.8% and ended yesterday’s trading session at $407.48.

GS’ strong fundamentals are reflected in its POWR Ratings. The stock has a B grade for Value. Click here to see the additional ratings for GS’ Growth, Momentum, Stability, Sentiment, and Quality. GS is ranked #18 of 22 stocks in the A-rated Investment Brokerage industry.

MSFT shares were trading at $316.38 per share on Wednesday afternoon, down $12.63 (-3.84%). Year-to-date, MSFT has declined -5.93%, versus a -1.39% rise in the benchmark S&P 500 index during the same period.

Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.

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