How Are 2007's Top Five Dow Stocks Performing This Year?

Last year the Dow Jones Industrial Average gained over 800 points to finish the year with a moderate, but acceptable gain of 6.4%. Nineteen of the 30 Dow stocks posted gains with fifteen posting double-digit gains. In fact, five of the Dow stocks had returns of over 30% last year. So how are last year’s top performers doing this year?

Merck (MRK)

Last year’s top Dow stock was Merck, which posted an incredible 37.4% gain. Unfortunately, this year it has been one of the worst performers, with shares losing over 40%. Negative media coverage along with the US non-approval of Cordaptive has weighed heavily on the shares. However, the company’s management is still very optimistic about the long-term outlook of the company and has continually hinted that more light will be shed regarding these future plans at the December Investor Day.

McDonald’s (MCD)

The ever-popular fast-food chain posted a spectacular 36.4% gain last year and is the only one of last year’s top-performers to show a gain this year. To date, MCD’s shares have been immune to the global slowdown and are up 4%. Strong worldwide sales along with a some key menu changes (e.g. Iced coffees, $1 drinks, Value menu) have allowed the company to continue to beat analysts estimates the last three quarters.

Intel (INTC)

After delivering a brilliant 34.3% return last year, INTC’s shares have slid over 21% in 2008. Macro environment concerns have continued to weigh on this stock despite beating analyst top and bottom line estimates in the previous quarter.

Chevron (CVX)

The recent free-fall in oil prices has erased CVX’s earlier market gains and now shares are down 11% from the beginning of the year. After finishing last year with an impressive 30.6% gain to $91.36, CVX’s shares traded above $100 during the early summer when oil prices were approaching $150/barrel. Now with oil below $110, the company has lowered expectations for 2008/2009 taking it’s stock price with it.

Coca Cola (KO)

Finally, we get to Coca Cola who saw its shares gain just over 30% last year, but they have dropped almost 15% this year due primarily to the slowing macro environment. The rising U.S. dollar is also weighing on KO’s shares as almost 80% of their operating income comes from international markets. In addition, rising fuel costs and falling consumer discretionary incomes have caused many investors to exit their positions.

At the time this article was published, the author did not have a financial position in any of the stocks mentioned in this article.

Comments

[ajhough:]

As I monthly seek to find assets that have value, I have lost money on almost every purchase made this year. Although the multiples are small, the dividends are pretty healthy, the stocks continue to seek a new evaluation, even lower. Unfortunately, we probably will have this for four more years...(remember "four more years!")

2008 Sep 07 08:55 AM

[tginomorebush:]

NOmccain..........NOpa...

2008 Sep 08 08:19 AM

[tginomorebush:]

NOmccain............NO...

2008 Sep 08 08:20 AM

[notsosmart:]

if it has a good yield the price does not matter.check out FRO.

2008 Sep 08 04:24 PM