In this detailed analysis, we explore the 15 top-performing Dow stocks of 2022. If you’re looking for a quick summary, feel free to jump straight to the 5 Best Performing Dow Stocks in 2022.
The Dow Jones Industrial Average (DJIA) serves as a crucial stock market index that encapsulates the performance of 30 major, publicly traded companies listed on both the New York Stock Exchange (NYSE) and NASDAQ. As one of the oldest and most widely recognized stock market indices globally, the DJIA was established in 1896 and has evolved into a vital benchmark for gauging the overall performance of the U.S. stock market. This index is determined by the stock prices of these 30 companies, where each company’s weight is influenced by its market capitalization, representing the total value of its outstanding shares.
Often regarded as a key indicator of the overall health of the U.S. stock market, the Dow Jones Industrial Average has unfortunately reported a total return of -9.3% year-to-date (YTD), including reinvested dividends. This decline mirrors the deteriorating conditions of the U.S. economy in 2022, attributed largely to the Federal Reserve’s ongoing interest rate hikes. After three consecutive years of robust positive returns in 2019, 2020, and 2021, this year marks a significant downturn for investors.
The 30 component stocks of the DJIA are meticulously selected by the editors of the Wall Street Journal, based on the companies’ overall significance to the economy and the stock market. The index is frequently updated to reflect changes in the market, with new companies being added while older ones are phased out. The most recent reconstitution occurred in 2020, introducing firms like Amgen Inc. (NASDAQ:AMGN), Salesforce, Inc. (NYSE:CRM), and Honeywell International Inc. (NASDAQ:HON), while removing Exxon Mobil Corporation (NYSE:XOM), Raytheon Technologies Corporation (NYSE:RTX), and Pfizer Inc. (NYSE:PFE). Notably, the companies that were removed from the index were among the top performers in 2022, achieving total returns of 84.60%, 18.08%, and -9.39%, respectively, significantly outperforming the broader market.
The DJIA has notably outperformed other key market indices such as the S&P 500 and NASDAQ in 2022. With a YTD total return of -9.3%, it contrasts sharply with the -34.4% return of the Nasdaq and the -18.0% return of the S&P 500. This performance can be attributed to the defensive sector, which accounts for 29.49% of the total weightage of the Dow. The leading constituents of the Dow Jones Industrial Average Index include UnitedHealth Group Inc, The Goldman Sachs Group Inc, and The Home Depot Inc, making up 10.52%, 6.90%, and 6.31% of the index, respectively.
Our Methodology for Ranking Stocks
In this article, we have meticulously compiled the 15 Best Performing Dow Stocks in 2022, ranking them based on total return. Our selection is based on a thorough analysis of their performance metrics, and we have also included the hedge fund holding positions among the 920 hedge funds tracked by Insider Monkey.
Explore the 15 Top Performing Dow Stocks of 2022
15. Dow Inc. (NYSE:DOW)
YTD Total Return as of December 25, 2022: -5.83%
Number of Hedge Fund Holders: 43
Based in Midland, Michigan, Dow Inc. (NYSE:DOW) operates as a leading multinational chemical company that offers a diverse portfolio of chemical and material products. These include essential items such as plastics, coatings, and specialty chemicals. The company’s operations are strategically organized into three key segments: Packaging and Specialty Plastics, Infrastructure Solutions, and Performance Materials and Coatings. The Packaging and Specialty Plastics segment focuses on innovative packaging and specialty plastic products, including films, sheets, and adhesives. The Infrastructure Solutions segment develops and markets products aimed at the construction, transportation, and energy infrastructure sectors, such as insulation, roofing, and sealants. Meanwhile, the Performance Materials and Coatings segment is dedicated to producing high-performance materials and coatings, including various chemicals, resins, and pigments.
On October 21, 2022, analyst Frank Mitsch from Fermium Research adjusted his price target for Dow Inc. (NYSE:DOW) to $50, while maintaining a positive Buy rating on the stock. The analyst expressed confidence in the sustainability of the company’s current dividend yield of 6.2%.
In addition to Dow Inc. (NYSE:DOW), notable companies such as The Travelers Companies, Inc. (NYSE:TRV), Merck & Co., Inc. (NYSE:MRK), and Chemical Corporation (NYSE:CVX) are also featured in our list of the 15 best performing Dow stocks in 2022.
According to data from Insider Monkey, 43 hedge funds held positions in this company by the end of the third quarter. Pzena Investment Management was the largest stakeholder in Dow Inc. (NYSE:DOW) at that time.
14. The Procter & Gamble Company (NYSE:PG)
YTD Total Return as of December 25, 2022: -4.38%
Number of Hedge Fund Holders: 69
Headquartered in Cincinnati, Ohio, The Procter & Gamble Company (NYSE:PG) stands as one of the largest consumer goods companies globally. Established in 1837, this powerhouse offers a comprehensive range of household and personal care products, including laundry detergents, diapers, and beauty items. The company’s operations are structured into three primary segments: Beauty, Health and Grooming, and Household Care.
On November 22, 2022, Greg Badishkanian from Wolfe Research initiated coverage of The Procter & Gamble Company (NYSE:PG) with a price target of $156 and an Outperform rating for the stock. The analyst anticipates that the company’s strategic investments will enhance its market share significantly.
As per Insider Monkey data, 69 hedge funds owned shares of The Procter & Gamble Company (NYSE:PG) by the end of the third quarter, with Bridgewater Associates retaining the largest stake in the company at that point.
13. Visa Inc. (NYSE:V)
YTD Total Return as of December 25, 2022: -4.29%
Number of Hedge Fund Holders: 165
Visa Inc. (NYSE:V) is a prominent multinational financial services provider and ranks among the largest payment processing companies worldwide. The company’s operations are segmented into two main categories: Client Services and Data Processing. The Client Services segment focuses on offering payment processing and related services to various clients, including financial institutions and merchants. On the other hand, the Data Processing segment manages Visa’s expansive payment processing network and sells data analytics products.
On October 27, 2022, James Fotheringham at BMO Capital lowered his price target for Visa Inc. (NYSE:V) to $241 while sustaining an Outperform rating on the stock. The analyst revised his FY23 EPS estimate to $8.18 but remains optimistic about the stock’s performance, citing its resilience against inflation and economic downturns.
By the end of Q3 2022, 165 hedge funds in Insider Monkey’s database were invested in Visa Inc. (NYSE:V), with TCI Fund Management as the largest stakeholder at that time.
12. Walmart Inc. (NYSE:WMT)
YTD Total Return as of December 25, 2022: 0.92%
Number of Hedge Fund Holders: 68
Based in Bentonville, Arkansas, Walmart Inc. (NYSE:WMT) is a leading multinational retail corporation with a vast network of over 11,500 stores across 27 countries. Walmart’s operations are divided into three major segments: Walmart U.S., Walmart International, and Sam’s Club. The Walmart U.S. segment encompasses the management of Walmart stores and their e-commerce platforms within the United States, while the Walmart International segment oversees Walmart stores and online operations in other countries. The Sam’s Club segment operates membership-only warehouse clubs across the United States.
On December 19, 2022, Karen Short from Credit Suisse initiated coverage on Walmart Inc. (NYSE:WMT) and raised her price target to $170, maintaining an Outperform rating on the stock. The analyst believes Walmart is strategically positioned to thrive in a volatile macroeconomic environment, having significantly increased its market share since early 2021.
According to Insider Monkey, 68 hedge funds expressed confidence in Walmart Inc. (NYSE:WMT) by the end of Q3 2022, with Fisher Asset Management holding the largest long position in the company’s stock at that time.
11. McDonald’s Corporation (NYSE:MCD)
YTD Total Return as of December 25, 2022: 2.05%
Number of Hedge Fund Holders: 53
McDonald’s Corporation (NYSE:MCD) is a globally recognized fast-food giant, with over 38,000 outlets spread across more than 100 countries. The company’s operations are divided into four segments: United States, International Lead Markets, High Growth Markets, and Foundational Markets & Corporate.
On December 21, 2022, Andy Barish from Jefferies raised his price target for McDonald’s Corporation (NYSE:MCD) to $315, maintaining a Buy rating on the stock. The analyst is optimistic about the prospects of the U.S. restaurant and food service distribution sector as it heads into 2023. He notes that full-service restaurants are expected to remain in demand, and any potential sales decline will be mitigated by effective cost management and reduced food inflation.
According to Insider Monkey, 53 hedge funds took long positions in McDonald’s Corporation (NYSE:MCD) by the end of the third quarter, with Bridgewater Associates holding the largest stake in the company at that time.
10. Honeywell International Inc. (NASDAQ:HON)
YTD Total Return as of December 25, 2022: 4.67%
Number of Hedge Fund Holders: 53
Located in Morris Plains, New Jersey, Honeywell International Inc. (NASDAQ:HON) is recognized as one of the largest technology and manufacturing companies in the world. The company offers a broad spectrum of products and services, including those related to aerospace, industrial technologies, and building solutions, in addition to performance materials and technologies. Honeywell’s business is segmented into four core areas: Aerospace, Home and Building Technologies, Safety and Productivity Solutions, and Performance Materials and Technologies.
On December 1, 2022, Julian Mitchell from Barclays raised his price target for Honeywell International Inc. (NASDAQ:HON) to $229, maintaining an Overweight rating on the stock. The analyst expressed optimism regarding the outlook for U.S. residential construction as the market heads into 2023.
According to Insider Monkey, 53 hedge funds were bullish on Honeywell International Inc. (NASDAQ:HON) at the end of Q3 2022, with Diamond Hill Capital being the largest holder of the company’s shares at that time.
9. Johnson & Johnson (NYSE:JNJ)
YTD Total Return as of December 25, 2022: 6.47%
Number of Hedge Fund Holders: 85
Johnson & Johnson (NYSE:JNJ) is a multinational healthcare leader offering an extensive range of healthcare products and services, including pharmaceuticals, medical devices, and consumer health products. The company’s operations are organized into three significant segments: Pharmaceuticals, Medical Devices, and Consumer Health. The Pharmaceuticals segment focuses on researching, developing, and marketing prescription drugs and vaccines, while the Medical Devices segment specializes in the design and sale of medical equipment and diagnostic tools. The Consumer Health segment encompasses the development and sale of various over-the-counter healthcare items, including personal care and baby care products.
On December 12, 2022, Joanne Wuensch from Citi raised her price target on Johnson & Johnson (NYSE:JNJ) to $205 while maintaining a Buy rating on the stock. The analyst noted that while the North American medical supplies and technology group may face challenges heading into 2023, these issues are expected to ease in the latter half of the year, providing relief for operating margins.
Data from Insider Monkey indicates that 85 hedge funds held stakes in Johnson & Johnson (NYSE:JNJ) at the end of the September quarter, with Fisher Asset Management being the largest stakeholder at that time.
8. UnitedHealth Group Incorporated (NYSE:UNH)
YTD Total Return as of December 25, 2022: 7.17%
Number of Hedge Fund Holders: 110
UnitedHealth Group Incorporated (NYSE:UNH) is a major player in the healthcare sector, offering a comprehensive range of healthcare products and services, including insurance, healthcare delivery, and innovative healthcare technology solutions. The company organizes its operations into four key segments: UnitedHealthcare, Optum, Healthcare Services, and Healthcare Innovation. UnitedHealthcare focuses on underwriting and administering healthcare insurance plans for individuals, families, and employer groups, while Optum delivers healthcare services and technology solutions. The Healthcare Services segment is responsible for providing healthcare services through clinics and surgical centers, and the Healthcare Innovation segment is dedicated to developing and commercializing new healthcare products and services.
On October 17, 2022, Ben Hendrix from RBC Capital raised his price target for UnitedHealth Group Incorporated (NYSE:UNH) to $592 while maintaining an Outperform rating on the stock. The analyst noted that preliminary indications for 2023 suggest cautious guidance, which still allows for the normalization of inpatient patterns, inflationary costs, and considerations such as the approaching flu season.
By the end of Q3 2022, 110 hedge funds tracked by Insider Monkey were long UnitedHealth Group Incorporated (NYSE:UNH), with GQG Partners being the largest stakeholder in the company at that time.
7. The Coca-Cola Company (NYSE:KO)
YTD Total Return as of December 25, 2022: 10.97%
Number of Hedge Fund Holders: 59
Based in Atlanta, Georgia, The Coca-Cola Company (NYSE:KO) is a renowned multinational beverage corporation and one of the world’s largest producers of non-alcoholic beverages. The company boasts a vast portfolio of over 500 brands, including iconic names like Coca-Cola, Diet Coke, Fanta, and Sprite.
On October 26, 2022, Peter Grom from UBS raised his price target for The Coca-Cola Company (NYSE:KO) to $68 while maintaining a Buy rating on the stock. The analyst believes the company presents a favorable risk/reward scenario, highlighting its potential for solid revenue growth.
As of the end of Q3 2022, 59 hedge funds held long positions in The Coca-Cola Company (NYSE:KO), according to Insider Monkey, with Berkshire Hathaway having the largest stake in the company at that time.
6. International Business Machines Corporation (NYSE:IBM)
YTD Total Return as of December 25, 2022: 11.3%
Number of Hedge Fund Holders: 40
Located in Armonk, New York, International Business Machines Corporation (NYSE:IBM) is a prominent global technology firm. The company provides a wide array of technology products and services, such as hardware, software, consulting, and solutions related to cloud computing and artificial intelligence (AI). IBM’s operations are structured into five main segments: Cloud & Cognitive Software, Global Business Services, Global Technology Services, Systems, and Global Financing.
On October 19, 2022, International Business Machines Corporation (NYSE:IBM) announced its third-quarter results, reporting revenue of $14.1 billion, surpassing market expectations by $550 million. The company’s Normalized EPS was $1.81, exceeding market predictions by $0.01.
According to Insider Monkey, 40 hedge funds had stakes in International Business Machines Corporation (NYSE:IBM) at the end of the September quarter, with Arrowstreet Capital being the largest stakeholder at that time.
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Disclosure: None. 15 Best Performing Dow Stocks in 2022 is originally published on Insider Monkey.