In this article, we will take a look at 15 of the biggest Dow companies by market cap.
The Dow Jones Industrial Average, or simply the Dow, is one of the oldest indexes in the world. Having been founded in 1896 by Charles Dow and Edward Jones, the index is easily one of the most followed indexes in the world.
Originally the The Dow Jones Industrial Average comprised of only 12 companies, mainly with operations in oil and gas, sugar, tobacco and railroads. As the U.S. economy evolved, however, so did the Dow index. Now the index includes 30 companies, with companies operating in many different sectors including technology. As it did before, the companies listed on the Dow today are among the leaders in their core fields.
Given that it only includes 30 large capitalization U.S. companies, the Dow index arguably doesn’t reflect the U.S. economy as well as another popular index, the S&P 500, which includes 500 U.S. companies. Furthermore, since the Dow index is a price weighted index, stocks with higher stock prices have more influence on the index regardless of their market cap. Price weighted indexes are also affected by stock splits while market cap weighted indexes are not.
While it has its limitations, The Dow Jones Industrial Average has nevertheless done well with the index rising from 40.45 on January 1, 1897 to 30,423.81 on 10/19/22.
Given economic cycles, Dow Jones Industrial Average has experienced bull and bear markets over the years.
According to Guggenheim, the Dow Jones has experienced four secular bear markets in its history before this year. Each of the four secular bear markets lasted for over 10 years and the average annualized returns over those years were near zero or slightly negative. Meanwhile, the Dow has experienced 5 secular bull markets, each of which have lasted from 5 years to 17 years in length. The average annualized returns of those bull markets have been 8.72% or higher.
Given the stock market’s performance in 2022, it seems we are in a bear market, although it isn’t a secular bear market.
Due to the Federal Reserve increasing interest rates substantially this year, the markets have declined substantially. The Dow Jones Industrial Average has fallen almost 17% year to date and S&P 500 has fallen nearly 23% year to date.
With inflation remaining high, it seems the Federal Reserve could raise interest rates even more. With the rate hikes and increasing probability of a recession in 2023, the markets could decline further if economic data doesn’t meet expectations.
Given the uncertainty, it could be a good idea for investors to own a well diversified portfolio of quality stocks across many different sectors. In the Dow Jones index, here are some leading stocks:
Methodology
For the 15 Biggest Dow Companies By Market Cap, we took the 15 largest stocks listed on the The Dow Jones Industrial Average by market capitalization as of 10/19 according to FINVIZ.com and we ranked them #15 to #1.
15 Biggest Dow Companies By Market Cap
15. Cisco Systems, Inc. (NASDAQ:CSCO)
Market Capitalization as of 10/19: $173.83 billion
Cisco Systems, Inc. (NASDAQ:CSCO) is a leading maker of IP based networking and other products with a market capitalization of almost $174 billion as of 10/19. Although its shares are down 34% year to date, analysts are expecting Cisco Systems, Inc. (NASDAQ:CSCO) to earn more money next year with an estimated next year EPS of $3.8 versus the trailing twelve month EPS of $2.82. Cisco Systems, Inc. (NASDAQ:CSCO) also has a forward P/E of around 11 which could be attractive if the company keeps growing earnings.
14. The Walt Disney Company (NYSE:DIS)
Market Capitalization as of 10/19: $184.65 billion
The Walt Disney Company (NYSE:DIS) is an entertainment conglomerate whose stock has fallen 36% year to date. Although economic headwinds could weigh on demand for The Walt Disney Company (NYSE:DIS) in the near term, the company remains well positioned in the long term given its great assets. If Disney+ can become the next Netflix, there could be even more upside in the long term.
As of October 19, The Walt Disney Company (NYSE:DIS) had a market capitalization of $184.65 billion, ranking it #14 on our list of 15 Biggest Dow Companies By Market Cap.
13. McDonald’s Corporation (NYSE:MCD)
Market Capitalization as of 10/19: $187.20 billion
Although its shares are down around 6.5% year to date, McDonald’s Corporation (NYSE:MCD) has done really well since 2015 with the stock having increased almost 150%. As a result, McDonald’s Corporation (NYSE:MCD) is the most valuable restaurant chain on the Dow with a market capitalization of $187.20 billion. If it continues its growth, McDonald’s Corporation (NYSE:MCD) has more upside in the long term.
12. Merck & Co., Inc. (NYSE:MRK)
Market Capitalization as of 10/19: $237.05 billion
Merck & Co., Inc. (NYSE:MRK) is a leading pharmaceutical giant whose shares are near an all time high. Although the Dow is down almost 17% year to date, Merck & Co., Inc. (NYSE:MRK) shares are actually up almost 22%. As a result, Merck & Co., Inc. (NYSE:MRK) has a market capitalization of $237.05 billion as of 10/19, ranking it #12 on our list of 15 Biggest Dow Companies By Market Cap.
11. The Coca-Cola Company (NYSE:KO)
Market Capitalization as of 10/19: $245.92 billion
The Coca-Cola Company (NYSE:KO) is a leading beverage company that’s worth almost $246 billion as of 10/19. Given the relatively stable demand for its products, The Coca-Cola Company (NYSE:KO) shares are only down 5.5% year to date and the company remains very profitable despite the economic headwinds. For the second quarter, The Coca-Cola Company (NYSE:KO) reported adjusted EPS of $0.70 versus the consensus of $0.67 and revenue of $11.3 billion versus the consensus of $10.55 billion.
10. The Home Depot, Inc. (NYSE:HD)
Market Capitalization as of 10/19: $288.56 billion
The Home Depot, Inc. (NYSE:HD) is a leading retailer with a market capitalization of almost $290 billion that has been affected by the rising interest rates. Given that interest rates have increased, mortgage rates have surged since the beginning of the year, and demand for new housing is lower. With lower housing demand, demand for The Home Depot, Inc. (NYSE:HD)’s products isn’t as strong. Although shares are down almost 34% year to date, housing demand will eventually normalize and The Home Depot, Inc. (NYSE:HD) will benefit.
9. The Procter & Gamble Company (NYSE:PG)
Market Capitalization as of 10/19: $312.1 billion
The Procter & Gamble Company (NYSE:PG) is a leading consumer staples company that’s worth $312.1 billion. Although the stock isn’t as attractive from a dividend perspective given the interest rate hikes, The Procter & Gamble Company (NYSE:PG) is still attractive long term given the company’s leading brands and earnings power. While inflation has caused some consumers to buy cheaper brands, there’s a good chance the Federal Reserve will ultimately control inflation. If inflation is normal and The Procter & Gamble Company (NYSE:PG) keeps growing earnings, the company could remain one of the most valuable Dow stocks.
8. JPMorgan Chase & Co. (NYSE:JPM)
Market Capitalization as of 10/19: $336.6 billion
JPMorgan Chase & Co. (NYSE:JPM) is the most valuable bank stock listed on the Dow given its market capitalization of $336.6 billion. Although JPMorgan Chase & Co. (NYSE:JPM) faces headwinds if a recession occurs and its stock could decline further, the company’s CEO Jamie Dimon has been saying there could be a recession for a while and he has begun preparing JPMorgan Chase & Co. (NYSE:JPM) to navigate the headwinds. If successful, the bank could be better positioned for growth in the future.
7. Chevron Corporation (NYSE:CVX)
Market Capitalization as of 10/19: $339.4 billion
Chevron Corporation (NYSE:CVX) is the most valuable oil and gas company listed on the Dow given Salesforce replaced Exxon Mobil in 2020. Given that the price of oil and gas have increased substantially from the pandemic lows, Chevron Corporation (NYSE:CVX)’s profits have increased and its market cap is now around $340 billion as of October 19. In the longer term, Chevron Corporation (NYSE:CVX) will have to manage to transition to green energies successfully to keep growing.
6. Walmart Inc. (NYSE:WMT)
Market Capitalization as of 10/19: $368.21 billion
Walmart Inc. (NYSE:WMT) is the most valuable retailer listed on the Dow with a market cap of almost $370 billion as of October 19. Although it arguably could be worth a lot more if it entered into e-commerce earlier, Walmart Inc. (NYSE:WMT) is nevertheless very profitable given its annual net income of $13.51 billion in 2021. In terms of demand, Walmart Inc. (NYSE:WMT) CEO John Furner said that he is increasingly seeing new customers who were ‘at higher incomes than what we have seen previously’ and that there is still ‘a lot of demand in the United States’.
5. Visa Inc. (NYSE:V)
Market Capitalization as of 10/19: $389.96 billion
Visa Inc. (NYSE:V) is a payments giant that’s worth almost $390 billion as of 10/19. Although a slower U.S. or global economy could mean less payments and hence potentially less growth for the company, Visa Inc. (NYSE:V) remains well positioned in the long term.
Wedgewood Partners commented on Visa Inc. (NYSE:V) in their Q3 2022 investor letter,
“Visa Inc. (NYSE:V) continues to report strong double-digit growth in payment volumes throughout the first two months of the calendar third quarter. The stock suffered after concerns about potential adverse legislation related to its credit card routing practices began to surface. Similar legislation related to the Company’s debit routing practices was passed into law back in 2010. Not unlike the previous legislation, the Company’s value proposition to merchants, consumers and bank-issuing customers and acquirers is robust enough to help blunt the potential effects the legislation might have in the near term. Over a multiyear time horizon, it would be quite difficult for any currently non-existent or even sub-scale credit routing network to add the value that Visa (or MasterCard) can already add today.”
As of 10/19, Visa Inc. (NYSE:V) ranks #5 on our list of 15 Biggest Dow Companies By Market Cap.
4. Johnson & Johnson (NYSE:JNJ)
Market Capitalization as of 10/19: $434.82 billion
Johnson & Johnson (NYSE:JNJ) is a healthcare giant that giant that recently reported Q3 adjusted EPS of $2.55 versus the consensus of $2.48. Revenue for the period was $23.8 billion, versus the consensus of $23.34 billion. While Johnson & Johnson (NYSE:JNJ) faces headwinds if the economy worsens, the company nevertheless is confident in growth given its breadth of portfolio. Given Johnson & Johnson (NYSE:JNJ) has been growing for many decades, the stock is the fourth most valuable Dow stock by market capitalization.
3. UnitedHealth Group Inc. (NYSE:UNH)
Market Capitalization as of 10/19: $483.64 billion
UnitedHealth Group Inc. (NYSE:UNH) is one of the leading managed healthcare and insurers in the world. Through M&A and organic growth, UnitedHealth Group Inc. (NYSE:UNH) has increased its annual net income from slightly over $5.1 billion in 2011 to almost $17.3 billion last year. UnitedHealth Group Inc. (NYSE:UNH)’s EPS has also increased substantially over that time. Given its profitability and its businesses, UnitedHealth Group Inc. (NYSE:UNH) has a market capitalization of $483.64 billion as of 10/19.
2. Microsoft Corporation (NASDAQ:MSFT)
Market Capitalization as of 10/19: $1,807.47 billion
Microsoft Corporation (NASDAQ:MSFT) is a leading tech company that’s worth over $1.8 trillion as October 19, making it #2 on our list of 15 Biggest Dow Companies By Market Cap. Given its growing cloud business, Microsoft Corporation (NASDAQ:MSFT)’s recurring sales have increased substantially over the last 10 years, and Microsoft Corporation (NASDAQ:MSFT) has benefited from the trend with higher earnings and arguably a higher valuation.
1. Apple Inc. (NASDAQ:AAPL)
Market Capitalization as of 10/19: $2,388.96 billion
With a market cap of almost $2.4 trillion as of October 19, Apple Inc. (NASDAQ:AAPL) is the most valuable company listed on the Dow. Apple Inc. (NASDAQ:AAPL) is also the most valuable company in the world.
Given how popular its iPhones are, Apple Inc. (NASDAQ:AAPL) is very profitable. According to Macrotrends.com, the company reported annual net income of almost $94.7 billion last year, versus $25.9 billion in 2011. Although Apple Inc. (NASDAQ:AAPL) depends heavily on the iPhone for its profitability, the company has been able to retain its users and increase demand over time.
If it can continue to increase demand and increase its EPS, Apple Inc. (NASDAQ:AAPL) could remain one of the most valuable companies on the Dow in the future.
You can also take a look at 10 Most Valuable Internet Companies in 2000 vs. Today and 10 Biggest Industries In the US.
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Disclosure: None. 15 Biggest Dow Companies By Market Cap is originally published on Insider Monkey.
