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Should You Look at These Dow Stocks Instead of Dow ETF?

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Fears about fading Trump rally has been taking the market in its grip over the last few trading sessions and the Dow Jones Industrial Average seems to be the most vulnerable. The index logged a superb rally – packed with many record highs —post Trump’s election win in November and maintained its ascent till early March.

Trump’s pledges of higher fiscal spending and tax cuts mainly acted as tailwinds to Dow’s flight. Specially, the industrial sector has enjoyed special privileges on the President-elect’s plans for hefty infrastructure spending (read: DOW ETFs: More Rally Ahead or Have You Missed the Boat?).

However, the new government’s failure to push through the promised Health Care reform bill triggered concerns about its ability to enact other proposals like massive tax reduction. The Fed’s policy tightening concerns and renewed geopolitical risks following U.S. military’s move toward Syria and North America also spoiled the party to some extent last month. Overall, Dow-based ETF SPDR Dow Jones Industrial Average ETF DIA lost about 1.8% in the last one month (as of April 18, 2017).

Needless to say, overall, the Dow 30’s stock performances have been muted in the last one month, dragging down the entire index. But investors should note that some stocks were in the green even in this down phase of Dow. Below we highlight such stocks and see if these can excel in the Q1 earnings season (read: 4 Top Sector ETFs & Stocks to Outperform in Q1 Earnings).

Wal-Mart Stores Inc. (WMT - Free Report) – Up 5.72%

Wal-Mart is the world's largest retailer, engaging in the operation of mass merchandising stores. The Zacks Rank #3 (Hold) stock has a VGM (Value-Growth-Momentum) score of ‘A.’ The Zacks Industry Rank is in the Top 39%, at the timing of writing.

Caterpillar Inc. (CAT - Free Report) – Up 1.59%

Caterpillar is the world's largest manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. The Zacks Rank #1 (Strong Buy) stock has a VGM score of ‘C.’ The Zacks Industry Rank is in the top 7%. The stock has a positive Earnings ESP of 16.67%. A stock needs to have both a positive ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for an earnings beat to happen.

The stock witnessed one estimate for the upcoming quarter being revised upward by 4 cents in the last seven days, while no downward revision was noticed. The average earnings surprise for the last four quarters was 13.64%.

The Walt Disney Company (DIS - Free Report) – Up 2.17%

The Walt Disney Company, together with its subsidiaries and affiliates, is a leading diversified international family entertainment and media enterprise with five business segments. The Zacks Rank #3 (Hold) stock has a VGM score of ‘C.’ The Zacks Industry Rank is in the Top 27%.

Its estimate for the upcoming quarter has been revised up by a penny. Two out of nine analysts upgraded the estimate in the last one month while one downgraded the same.

McDonald's Corporation (MCD - Free Report) – UP 2.85%

McDonald's Corp. develops, operates, franchises and services a worldwide system of restaurants that make and sell a menu of value-priced foods. Though the VGM score of the stock is ‘D,’ its Earnings ESP is 3.79%. One out of 11 analysts raised the estimate for the upcoming quarter in the last seven days while none downgraded the same. MCD stock’s yield is decent at 2.56%.

Apple Inc. (AAPL - Free Report) – Up 0.86%

A company as big as Apple doesn’t need any introduction. It is engaged in designing, manufacturing and marketing mobile communication and media devices, personal computers, and portable digital music players. The Zacks Rank #2 (Buy) stock has a VGM score of ‘A.’ The Zacks Industry Rank is in the top 9%. The stock has a positive Earnings ESP of 6.47% (read: Take a Bite Out of Apple with These ETFs).

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