Now that 2015 is underway, 24/7 Wall St. wanted to see what the strategists and analysts expect for the stock market in 2015. We have derived our own estimate for the Dow Jones Industrial Average (DJIA) again in 2015, rising from the close of 17,823 for 2014 by roughly 7.4% to 19,142. Be advised that almost 2.7% of that expected 2015 return is from the average dividend yield of the DJIA stocks as of the end of 2014.
After the DJIA gained 7.5% to 17,823.07 at the end of 2014 and the S&P 500 was up 11.4% in 2014 total return, 24/7 Wall St. wants to know what lies ahead for the DJIA in 2015. Our methodology, and track record for prior years, for the 7.4% expected gain is listed on page 2 of this article.
First and foremost, the bull market is now nearly six years old, and the gains have now been exponential since that panic selling bottom in March of 2009. Outside of dividends, the 2013 gains were 26.5% in the DJIA and 29.6% for the S&P 500 Index.
So, where does that leave us for 2015? It turns out that the gains in late 2014 may have eaten into the potential gains of 2015. The same thing occurred in late 2013, with gains eating into the growth in 2014. Another issue is that there truly has not been a 10% firm market correction to speak of for too long. The September and October pullback in 2014 was so close to 10% that most strategists considered it a rounding error when looking for the formal 10% correction.
After creating a bullish and bearish case for all 30 DJIA stocks in 2015, we wanted to highlight the expected winners for 2015. We also then have included links to our reviews of each DJIA stock, and some of the key S&P 500 stocks.
Caterpillar Inc. (NYSE: CAT) is actually expected to be the top gainer for the DJIA in 2015, according to analysts. The consensus analyst price target would imply a gain of 19.3%, if you include that 3.2% dividend yield in the mix. With this still being battered and considered a value stock, many of Caterpillar’s growth markets remain more than just challenging at the start of 2015.
Boeing Co. (NYSE: BA) is expected to be the second best gainer of 2015, according to the analysts’ consensus price target, with an expected rise of 17.7%. Roughly 2.9% of that gain is Boeing’s dividend yield. Boeing was expected to be the top gainer in 2014 as well, but that did not occur. Boeing shares were up a sharp 84% in 2013 as the best DJIA stock of that year, but the return was down by 2.6% in 2014. Boeing has to see its deliveries live up to par in 2015.
General Electric Co. (NYSE: GE) is expected to be the third best-performing DJIA stock in 2015, according to analysts. GE is expected to gain 17.5% in 2015, if the analysts end up being correct. Just keep in mind that nearly 3.8% of that gain is the dividend yield. Also keep in mind that GE is in the largest state of change we have seen in a generation or more, and the performance for 2014 was a loss of 6.6%, versus an early 2014 view that GE would rise almost 3%.
Verizon Communications Inc. (NYSE: VZ) is expected to be the fourth best gainer of 2015, if the average of the analysts is correct, with an expected gain of 17.0%. It seems hard to imagine that a telecom and wireless carrier would be one of the top DJIA stocks in the midst of a price war, but the reality is that Verizon trades at a big discount to the market and to utility stocks. Verizon’s 4.7% dividend yield is the second highest on the DJIA.
For 2015, analysts expect that only four of the 30 DJIA stocks will lose money, when you take the dividend into consideration. Another two DJIA stocks are expected to have gains of less than 1%. Still, eight of the 30 DJIA stocks have expected returns from analysts above 10%, if you include the dividends.
Now that we have outlined what is nearly a full DJIA bull and bear case for 2015, here are links to each and every DJIA stock’s bullish and bearish outlook for the year:
- American Express Co. (NYSE: AXP) expected gain 7.2%
- AT&T Inc. (NYSE: T) expected gain 9.5%
- Boeing Co. (NYSE: BA) expected gain 17.7%
- Caterpillar Inc. (NYSE: CAT) expected gain 19.3%
- Chevron Corp. (NYSE: CVX) expected gain 13.2%
- Cisco Systems Inc. (NASDAQ: CSCO) expected gain 0.5%
- Coca-Cola Co. (NYSE: KO) expected gain 7.2%
- E.I. du Pont de Nemours and Co. (NYSE: DD) expected loss 2.3%
- Exxon Mobil Corp. (NYSE: XOM) expected gain 9.0%
- General Electric Co. (NYSE: GE) expected gain 17.5%
- Goldman Sachs Group Inc. (NYSE: GS) expected loss 1.7%
- Home Depot Inc. (NYSE: HD) expected gain 1.7%
- International Business Machines Corp. (NYSE: IBM) expected gain 7.8%
- Intel Corp. (NASDAQ: INTC) expected gain 0.8%
- Johnson & Johnson (NYSE: JNJ) expected gain 6.7%
- JPMorgan Chase & Co. (NYSE: JPM) expected gain 11.1%
- McDonald’s Corp. (NYSE: MCD) expected gain 6.0%
- 3M Co. (NYSE: MMM) expected gain 2.5%
- Merck & Co. Inc. (NYSE: MRK) expected gain 15.5%
- Microsoft Corp. (NASDAQ: MSFT) expected gain 9.9%
- Nike Inc. (NYSE: NKE) expected gain 7.2%
- Pfizer Inc. (NYSE: PFE) expected gain 14.1%
- Procter & Gamble Co. (NYSE: PG) expected gain 3.8%
- Travelers Companies Inc. (NYSE: TRV) expected loss 3.7%
- UnitedHealth Group Inc. (NYSE: UNH) expected gain 9.0%
- United Technologies Corp. (NYSE: UTX) expected gain 8.5%
- Verizon Communications Inc. (NYSE: VZ) expected gain 17.0%
- Visa Inc. (NYSE: V) expected gain 4.9%
- Wal-Mart Stores Inc. (NYSE: WMT) expected loss 1.9%
- Walt Disney Co. (NYSE: DIS) expected gain 3.7%