In this article, we will take a look at some of the best Dow stocks to invest in.
The Dow Jones Industrial Average dates back to May 26, 1896. Charles Dow, a journalist who helped start Dow Jones & Co. and The Wall Street Journal, created it as a simple way to keep score of the market. That early version would be almost unrecognizable today. It included only 12 companies, not 30.
The Dow didn’t enjoy a smooth start. Within a few months, it was already under pressure. By August 1896, the index had fallen more than 30%. Politics were part of the story as the US presidential election that year, a bitter contest between William McKinley and William Jennings Bryan, unsettled investors. Arguments over the gold standard filled newspapers and speeches, and markets reacted to the uncertainty.
The real stress test came decades later during the Great Depression. In 1932, the Dow dropped to 41.22, almost exactly where it had been more than 30 years earlier. An entire generation of gains disappeared. The climb back was slow and uneven. It took until the mid-1950s for the index to finally regain its pre-Depression highs.
Something similar played out during the Financial Crisis. The Dow sank to an intraday low of 6,547.05, a level last seen in 1997. From its October 9, 2007, peak of 14,165.53, that was a decline of nearly 54%. For investors watching in real time, it felt like the floor kept giving way. The recovery tested patience again, and the index didn’t break above its old high until March 5, 2013, more than four years and 1,004 trading days after the March 2009 bottom. It closed that session at 14,253.77.
More recently, the tone has shifted. Wall Street ended higher on January 5, with financial stocks doing most of the heavy lifting. Their gains pushed the Dow to a new all-time high. Energy stocks also moved sharply higher after a US military strike led to the capture of Venezuelan President Nicolás Maduro. When the market closed, the Dow was up 1.23%, finishing the day at 48,977.18.
In 2025 overall, the Dow gained 12.97% for the year. Its performance lagged slightly at times due to limited exposure to technology stocks. Even so, the index finished December up 0.7% and logged its eighth straight winning month, a streak not seen since 2018.
Given this, we will take a look at some of the best Dow stocks to invest in.
Our Methodology:
For this article, we began with a pool of 30 stocks from the Dow Jones Industrial Average (DJIA) and identified stocks with positive analyst sentiment. From that group, we picked 12 companies with the highest number of hedge fund investors, as per Insider Monkey’s database of Q3 2025, and ranked them accordingly.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
12. The Travelers Companies, Inc. (NYSE:TRV)
Number of Hedge Fund Holders: 47
The Travelers Companies, Inc. (NYSE:TRV) is among the best Dow stocks to invest in.
On January 5, Bank of America lowered its price target on The Travelers Companies, Inc. (NYSE:TRV) to $262 from $265 and kept an Underperform rating.
The firm said that pricing trends across P&C insurance products still look weak, similar to what played out in 2025. Pricing in liability lines remains supportive, but loss costs are climbing faster than prices. Personal auto rates have largely flattened, even as some investors are starting to expect declines after a period of strong profitability. BofA also noted that underwriter valuations do not look expensive, despite fundamentals moving in the “wrong direction.”
On January 2, The Travelers Companies, Inc. (NYSE:TRV) said that it completed the sale of its personal insurance business and most of its commercial insurance business in Canada to Definity Financial Corporation for about $2.4 billion. Travelers, the largest surety writer in North America, kept its Canadian surety operations as part of the deal.
The company plans to use roughly $0.7 billion of the net proceeds for additional share repurchases in 2026. The remaining cash will support ongoing operations and general corporate needs. Travelers expects the transaction and related buybacks to be accretive to earnings per share in 2026 and over the following years.
Jefferies LLC and Przygoda & Co. LLC acted as financial advisors on the transaction. Legal advice was provided by Skadden, Arps, Slate, Meagher & Flom LLP, and Stikeman Elliott LLP.
The Travelers Companies, Inc. (NYSE:TRV) provides property and casualty insurance across auto, home, and business lines. Its operations are organized into Business Insurance, Bond & Specialty Insurance, and Personal Insurance segments.
11. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 66
International Business Machines Corporation (NYSE:IBM) is one of the best Dow stocks to invest in.
On January 5, RBC Capital Markets raised the price target on International Business Machines Corporation (NYSE:IBM) to $350 from $300 and kept an Outperform rating.
The firm said that 2026 could be the year when AI tailwinds become more visible for companies that are ready for enterprise adoption. Those who are not may continue face pressure from the view that “AI is the death of software.” Enterprise spending appears to be stabilizing, with improvement showing up in select areas. GenAI is driving innovation, even as management teams stay cautious in their early 2026 guidance, the analyst noted.
International Business Machines Corporation (NYSE:IBM) is seeing solid momentum across its AI portfolio, including watsonx and Red Hat AI. The company has also partnered with Anthropic to integrate the Claude large language model into IBM’s software offerings, adding depth to its AI capabilities.
Hardware has played a role as well. IBM’s z17 mainframe platform, built with advanced AI inference features, has supported infrastructure demand. In the third quarter, that mix helped deliver 10% growth in the software business and 17% growth in the infrastructure segment.
International Business Machines Corporation (NYSE:IBM) focuses on hybrid cloud, artificial intelligence, and consulting services, serving enterprises around the world.
