This past year was a very good one for the Dow Jones Industrial Average. The blue-chip index saw 25 of its 30 stocks post share price gains for 2017, and the index closed the year up more than 24%.
There were two big winners in 2017 and three more stocks that posted very solid gains above 40%:
- Boeing Co. (NYSE: BA), up 89%
- Caterpillar Inc. (NYSE: CAT), up 68.9%
- Visa Inc. (NYSE: V), up 46.1%
- Apple Inc. (NASDAQ: AAPL), up 46.1%
- Wal-Mart Stores Inc. (NYSE: WMT), up 42.9%.
A stronger global economy contributed to the fortunes of at least two of these firms. while lower U.S. unemployment and improving wages helped the more consumer oriented companies post their gains.
This aerospace and defense giant simply defied gravity in 2017. The stock’s upward trajectory started early and didn’t let up for the entire year. The company will end the year with net new orders of more than 850 and operating cash flow north of $12 billion. The big question, of course, is can the company keep it up through 2018? Could Boeing’s stock price actually nearly double again? That does not seem possible, but the company appears poised for another very good year.
Like Boeing, Caterpillar benefited from a better global economy this year. Machinery orders have risen and the company should get a further boost from the recent changes to U.S. tax laws. Because U.S. companies can now expense certain capital purchases and a proposal to spend big on the nation’s infrastructure is reportedly on its way from the president’s desk, Caterpillar’s outlook for 2018 is also bright.
Along with virtually every other financial sector stock, Visa is expected to benefit significantly from the recent changes to the tax laws, primarily from the changes to the tax on repatriated cash. Goldman Sachs announced on Friday that it will take a hit of $5 billion as a result of the new laws, but what it did not say is that once that charge is in the rear-view mirror, the outlook for financial sector stocks is strongly upbeat. And what will Visa and the rest do with all that new cash? Shareholders will be among the first in line and will expect to be rewarded.
Despite being the world’s most valuable company at around $865 billion, the iPhone maker managed to grow its share price by 46% in 2017. That’s not easy to do, especially with every analyst — professional and amateur — ready to jump on any signal that the company is doomed — doomed, we tell you. Apple, too, has a huge pile of offshore cash that shareholders are going to want to see divvied up in the coming year to include a nice payout for themselves. The big question for 2018 is when Apple will hit $1 trillion in valuation.
Walmart did not prove this year that traditional brick-and-mortar retail can overcome the challenge from e-commerce giant Amazon.com. What it did prove, however, is that it could meet Amazon on its competitor’s own turf and not get buried when the dust settled. Walmart invested heavily in its online businesses this year and will probably need to do so again in 2018. But its cash flows have stabilized and appear to be up to the task.