In this article, we will take a look at the 12 Best Dow Stocks to Buy Right Now.

The Dow Jones Industrial Average is among the most popular stock market indices globally. Known as the Dow, the index monitors the performance of 30 blue-chip companies listed on the US stock exchanges. In 2024, the Dow index returned over 16%, compared to a 25% return for the broader market.

Historically, the Dow has performed better compared to the broader market. According to S&P Global, in the past 30 years up until June 2021, the Dow index returned approximately 11.16% compared to the market’s return of 10.6%. This growth is mainly due to the Dow’s stable, industry-leading companies that offer reliable dividends and returns.

Read More: 7 Most Undervalued Financial Stocks To Buy According to Analysts.

Since the beginning of 2025, Dow Jones has soared over 4% as mega-cap tech stocks surged following their positive earnings. Whereas, the S&P 500 index has jumped by 3.70% year-to-date, as of January 23.

Trump’s AI startup initiative is already pumping the tech stocks. The $500 billion Stargate AI infrastructure project led by Oracle, OpenAI, and SoftBank will accelerate the AI demand. Tech stocks are already dominating the market driven by the huge demand for AI. Nasdaq Composite returned nearly 30% in 2024, outperforming the Dow and the S&P 500.

The U.S. economy is expected to perform better this year compared to 2024 followed by lower interest rates and PCE inflation expected around 2.1%. Economists anticipate a suitable atmosphere for mergers and acquisitions.

Investing in Dow Jones stocks can be appealing in 2025 as they offer huge dividends and returns. The Dow stocks have strong balance sheets and have a proven track record of high yields.

With that, let’s take a look at the 12 Best Dow Stocks to Buy Right Now.

Our Methodology

We shifted through the Dow Jones Index and selected the 12 best Dow stocks based on hedge fund sentiment around each stock using Insider Monkey’s data for Q3 2024. The best Dow stocks are ranked in ascending order of their hedge fund holdings.

Why do we care about what hedge funds do? 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

12 Best Dow Stocks to Buy Right Now

12. 3M Company (NYSE:MMM)

No. of Hedge Fund Holders: 82

3M Company (NYSE:MMM) is an American multinational conglomerate with a wide range of operations. The company’s segments include Safety and Industrial, Transportation and Electronics, and Consumer. 3M’s commitment to R&D allows it to create unique products that offer pricing power and improve the market share. The diversified sales growth volume adds to 3M’s margin improvement, driving the company’s global reach.

3M Company (NYSE:MMM) kicked off 2024 on a challenging note following the spinning off of its healthcare division and slashing its dividend by 50%. The company’s strategic plan to manage expenses is working as MMM shares gained nearly 63% in 2024.

3M Company ended 2024 on a high note, beating earnings and revenue estimates in the fourth quarter of the year. In Q4 2024, the company posted adjusted earnings per share of $1.68, surpassing estimates by 9.32%, while the FY24 adjusted EPS was $7.30, up by 21% year-over-year. The company’s all business segments posted positive adjusted organic growth in Q4, presenting the first growth in all groups in nine quarters. 3M added $4.9 billion in FCF to the balance sheet with a remarkable 111% conversion rate, indicating strong cash flow management. In addition, the company continues to expand its innovation engine with 169 new products launched in 2024, a 32% increase from a year ago.

3M Company (NYSE:MMM) management expects Q1 2025 sales to be similar to Q4 2024. The company also aims to return a similar cash to shareholders over $3 billion in 2025 compared to $3.8 billion returned in 2024 through dividends and share repurchases. The company’s 2025 share repurchase program will be around $1.5 billion with expectations of strong operating performance and capital deployment to drive earnings growth.

11. The Home Depot, Inc. (NYSE:HD)

No. of Hedge Fund Holders: 82

Home Depot, Inc. (NYSE:HD) is one of the largest home improvement specialty retailers in the world. The company engages in the sale of building materials and home improvement equipment. The company has more than 2,300 stores in the U.S., Canada, and Mexico.

In 2025, real estate experts expect a rise in housing inventory driven by higher demand due to lower interest rates compared to 2024. Over the past year, HD shares registered a modest gain of over 15%. This year with a higher demand expected in the housing market, Home Depot can gain on that momentum. Surprisingly, Hurricanes Helene and Milton have unlocked additional demand for the firm.

The home improvement industry is vast and fragmented, valued at more than $1 trillion annually. Home Depot, Inc. (NYSE:HD) being one of the largest players in the sector, only grasps 15% market share. This reflects Home Depot’s potential to capture a wider market. Moreover, the company’s operating cash flow sits at more than $15 billion, as of Q3 2024, which adds to the company’s ability to invest and expand.

Core inflation has cooled to 3.2% yearly growth, while economists projected 3.3% annual growth. The slowing inflation helps HD because it allows consumers certain relief from higher prices. In 2025, total year-on-year CPI and consumer inflation rates are expected to fall below the Fed’s 2% target, which would be great for HD.