Investing

10 Dow Stocks Holding Up the Best in the 2020 Bear Market Carnage

Jon C. Ogg

With headlines being lined up to read “The Worst Quarter in History,” it’s hard to imagine that any company that does not have a direct benefit from the COVID-19 pandemic for its main operations would be doing well. Sometimes it’s relative performance rather than absolute performance that counts. At one point last week, the Dow Jones industrial average was down an unprecedented 38% from its peak in February. Coming into the last day of trading for the first quarter of 2020, the Dow was down 21.7% year to date.

The stock market is really a market of stocks, and it turns out there have been some winners on an absolute basis and on a relative basis. 24/7 Wall St. screened the leaders of the Dow and it was a bit surprising to see which ones were among the best (or least bad) performers. Consensus price target data and other consensus items are from Refinitiv unless noted otherwise.

Microsoft Corp. (NASDAQ: MSFT) led the pack with a year-to-date gain of 1.6%, even after having fallen more than 16% from its peak earlier this year. Despite warning that PC software sales would be weak, this is “all about the cloud,” and businesses are perhaps migrating to the cloud even more with so many workers having to work remotely. Microsoft stock was trading at $159.00, and its consensus target price was still almost $190 on last look.

Walmart Inc. (NYSE: WMT) was the second top Dow stock, though it was down 3% so far in 2020. Walmart is one of the “essential businesses” that has pledged to remain open during the COVID-19 pandemic. The retail giant’s shares have been volatile over the past month, but Walmart is touted as a recession-proof stock now, with at least some reason. The consumer buying habits are grossly different in the past 40 days than they had been for years, and that will make it hard to know how the sales fare overall compared with prior quarters, despite all the mass buying and hoarding. Trading at $114.50, Walmart has a consensus target price still close to $129.00.

Intel Corp. (NASDAQ: INTC) has tech exposure to PCs, but its server business is still strong, and Intel’s supply chain seemed to see less impact than some other chip companies. Intel was down 7% year to date, and at $54.75 it was down 21% from its 52-week high. The consensus target price was close to $62.50.

Procter & Gamble Co. (NYSE: PG) is supposed to be as defensive as it can get in consumer products. Its shares proved to not be immune as people just are not able to buy as much of their products or don’t need them while stuck at home. The company even warned about results in China. Yet, P&G shares were down less than 8% year to date coming into the last day of the quarter. Shares were trading at $112, and the consensus target price is near $127.50. The dividend yield is now close to 2.6%, and the stock is still down 13% from recent highs.

Johnson & Johnson (NYSE: JNJ) is also defensive by nature, in consumer products, pharmaceuticals and medical. It was down 8.8% so far in 2020 coming into the last day of the first quarter. This is one company in the race to develop a vaccine or treatment for COVID-19 as well, and many of its products should still be selling quite well. The stock was still down 15% from its high at the start of February, but trading at $133.00, its dividend yield is above 2.8%. The consensus target price was still close to $159.

Round out the 10 best performing Dow stocks year to date (and their yields):

  • Home Depot Inc. (NYSE: HD): −10% (3.1%)
  • Verizon Communications Inc. (NYSE: VZ): −10.8% (4.5%)
  • Visa Inc. (NYSE: V): −11.9% (0.75%)
  • Apple Inc. (NASDAQ: AAPL): −13.2% (1.25%)
  • UnitedHealth Group Inc. (NYSE: UNH): −14.5% (1.8%)

Again, sometimes it’s just the relative performance that really matters to investors. Imagine saying, “Gee, that’s great because it’s only down 10% in this awful stock market.”