Dow Jones Five High Return Stocks: CAT, CVX, DD, XOM, VZ
By:NewsyStocks   Monday, July 18, 2021 9:48 AM

Today I'm focusing on the Dow Jones Industrial Average's top five stocks based on highest trading returns over the past year. After doing some research, I shortlisted the best performing stocks within the index.

1.)    Caterpillar Inc. (NYSE: CAT) is the best performing. Caterpillar shares have given a return of $64.4 percent in the last year, with a dividend yield of 1.61 percent. The stock's P/B ratio can be considered as high at 5.5x, which means that the company has been earning a very high return on its assets and any additional news may already have been added on the current stock price. The stock has a high Beta of 1.7, which indicates that investing in the stock is risky, but at the same time it will give high returns. Analysts have given a Moderate Buy rating on the stock. CAT last traded at $109.36, up 1.65 percent on Friday.

2.)    Chevron Corp. (NYSE: CVX) has given a return of 45.4 percent in the last year to its shareholders, with a dividend yield of 2.94 percent. The price-to-book value of the stock is 1.92, which suggests that the company has been earning a high return on its assets and could get future high returns for investors. Beta for the stock is below 1 at 0.80, suggesting that the stock is less volatile. This actually conflicts with the theory that the higher the beta, the higher the return. In Chevron's case the beta has been low, but the returns have been high. Analysts have a bullish opinion on the stock and have given a Buy rating. CVX last traded at $106.19, up 1.45 percent.

3.)    El DuPont se Nemours & Co. (NYSE: DD) has also performed exceptionally well in the last year, giving a return of 45.5 percent with a dividend yield of 3.03 percent. However, the current position of the stock suggests risk for  investors as the company's P/B value is 4.54x, which is quite high compared with its peers. The beta of the company is also high at 1.4, suggesting volatility and risk in the investment. A beta of 1 one is considered ideal for risk averse investors. A higher Beta is considered good for risk taking investors. If beta is high, it means the risk is high, but it could bring in higher returns. Analysts at Bank of America/ Merrill Lynch reiterated a Buy rating and raised the price target to $62 per share. DD closed with gains of 0.50 percent to $54.09 on Friday.

4.)    Another energy company Exxon Mobil Corp. (NYSE: XOM) makes it to the list of top five companies with high returns. The company's stock gave a 40 percent return in the last year and has a dividend yield of 2.27 percent. The P/B value of the company is also good at 2.61. Its competitors have higher P/B values. This suggests that Exxon has been getting high returns on its assets, and could do the same in the near future. The company has a beta of 0.5, which is lower, hence suggesting that risk is low as volatility is low. Recently analysts at Argus reiterated the Buy rating on the stock with a $100 price target. XOM last traded at $83, down 0.92 percent.

5.)    Verizon Communications Inc. (NYSE: VZ) is the only tech sector company making it to the top five high return companies list. The company has a market capitalization of $104.2 billion and its stock gave a return of 37.4 percent along with a high dividend yield of 5.30 percent. The P/B value of the stock is also low at 1.16x, suggesting that the company's stock is still undervalued compared with the net value of its assets. The company has a low beta of 0.7, meaning low volatility in the price movement. Analysts at Robert W. Baird have given Outperform rating on the stock. VZ lost 0.16 percent to close at $36.82 on Friday.


 

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