What are the Dow Stocks?

The Dow Stocks that make up the Dow Jones Industrial Average (DJIA) are large and well-known, companies that are considered to be industry leaders and trade on the New York Stock Exchange or Nasdaq.

The DJIA (which dates all the way back to 1896) is price-weighted in that the stocks that are trading at a higher price have more of an impact on the index. While the DJIA is referenced as an indicator of overall stock market performance, some believe it is too narrowly focused to provide a true representation.

Today, the DJIA consists of 30 widely held U.S. public companies, each with a history of earnings growth dividend payments to its investors. These are large cap stocks (a market capitalization of $1 billion or more), that tend to rise and fall in unison with the overall stock market.

Like other blue chip stocks, the Dow stocks tend to outperform other investments. The biggest advantage to these stocks is that they are relatively safe, stable investments. For this reason, these stocks are typically the preferred investment choice of older investors looking for more conservative investments in an effort to preserve capital. Blue chip stocks are also known as income stocks due to their tendency to pay dividends.

During economic downturns, it is often advised to look for solid investments like the Dow stocks as they typically make a good recovery. A way to invest in the DJIA is through the “Dow Diamonds”, an exchange traded fund (ETF) that tracks the Dow Jones industrial average. The Diamonds trade under the ticker symbol DIA on the American Stock Exchange (AMEX). Each share represents about 1/100 of the price of the DJIA.

The current Dow Stocks include:

3m Co.
Alcoa Inc.
American Express Company
AT&T Inc.
Bank of America Corporation
Boeing Co.
Caterpillar Inc.
Chevron Corp.
Citigroup Inc.
E.I. du Pont de Nemours and Company
Exxon Mobil Corp.
General Electric Company
General Motors Corp.
Hewlett-Packard Co.
Intel Corporation
International Business Machines
Johnson & Johnson
JP Morgan & Chase & Co.
Kraft Foods Inc.
McDonald’s Corporation
Merck & Co., Inc.
Microsoft Corporation
Pfizer Inc.
The Coca-Cola Company
The Home Depot, Inc.
The Procter & Gamble Company
United Technologies Corporation
Verizon Communications
Wal-Mart Stores, Inc.
Walt Disney Company

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The above information is educational and should not be interpreted as financial advice. For advice that is specific to your circumstances, you should consult a financial or tax advisor.

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