Who Will Take GM's Place in the Dow?

While the fate of General Motors (GM) as a company is being debated by legislators and others, investors would agree that GM will be removed from the Dow Jones Industrial Average as the common stock faces the likely prospect of heading to zero despite efforts for a bailout of workers and suppliers. Some companies to consider as a replacement for GM include:

Abbott Labs (ABT) is a consistent performer with diversified healthcare operations, including pharmaceuticals, diagnostics, medical nutrition products, and medical devices/stents. Over the past decade, ABT has consistently raised its dividend and posted a stock price gain of about 17% while the Dow is down 1% and the S&P 500 is down 19%.

Amgen (AMGN) would be an ideal candidate for the initial biotech component in the Dow since its larger rival Genentech (DNA) is majority-owned by Roche (RHHBY), which is looking to buy the remaining stake it does not already own.

Apple (AAPL) has emerged as the technology bellwether and stock market leader, soaring over 900% in the past 10 years and its iPhone is outselling Motorola (MOT) and Research In Motion (RIMM) while its Mac and iPod brands continue to gain market share.

Cisco Systems (CSCO) is closely followed for its guidance on technology spending as the global leader in networking and internet infrastructure.

Comments

[20smoney:]

Apple would be a great Dow component.. They will outgain the majority of the market in the coming years.

2008 Nov 11 02:39 PM

[bosun.j:]

Lets see, which company can we use to make the DOW look better than it really is! Hmmm, I know! Apple! Yeah, Apple! That's it! That's the ticket!

2008 Nov 11 02:49 PM

[stockfan:]

Cisco (CSCO) should be added the DJIA. It is about as close to "Industrial" as you can get with any tech firm. They will be selling the gear that powers the Internet for a long time to come. Their performance, and outstanding level of financial transparency should put them into serious consideration.

2008 Nov 11 04:37 PM

[KenC:]

As much as I'd like to see Apple in the Dow, it's going to be Cisco.

2008 Nov 11 08:05 PM

[the508seal:]

MSFT's problems have nothing to do with the DJIA - In fact the DJIA helped the stock price of this 20th century company.


On Nov 11 03:48 PM poohead wrote:

> no not Apple. Anyone but AAPL. Its a great stock but not in the Dow.
> Look what happened to Msft when it joined the Dow. No AAPL in the
> dow.

2008 Nov 11 09:00 PM

[Constable Odo:]

Wall Street will definitely choose Cisco. In WS's opinion, Cisco makes really serious business devices, while Apple is still looked upon as merely a high-tech toy company.

2008 Nov 11 09:07 PM

[casey00001:]

What is your rationale for "investors would agree". It has to be an industrial stock. Who is better than GM in that regard? If you take it out you are not really measuring the economy. Apple is not a manufacturer but an integrator.

2008 Nov 12 10:10 AM

[brewer:]

None of these are industrial stocks. Maybe the DOW should be retired as we obviously do not have much of an industrial base left in the U.S.

2008 Nov 12 03:24 PM