After a year in which markets navigated vaccines, variants, inflation and a worn-out supply chain, Microsoft (MSFT), Home Depot (HD), Goldman Sachs (GS), UnitedHealth (UNH) and Cisco Systems (CSCO) emerged as the year’s best-performing Dow Jones stocks, respectively.
Taken together, the gains for those names reflect a broader market rebound despite Covid-related turbulence, as well as demand for home renovation and cloud computing, as the pandemic reshapes work and leisure.
The Dow Jones Industrial Average is up 19% year to date.
Microsoft stock is up 53.4% so far this year as of Dec. 28 — the biggest winner of the Dow Jones industrial average. Of those stocks, it has the second-highest Composite Rating, at 93. Its EPS Rating is 93.
Shares of the software giant dipped 0.35% to 341.25 in the stock market today. Microsoft stock is extended from a flat base with a 305.94 buy point.
Microsoft has benefited from its transition to cloud computing. That business has seen more demand as remote work endures during the pandemic and digital adoption accelerates. More recently, the company has also pitched its digital offerings as a salve for rising prices.
“Digital technology is a deflationary force in an inflationary economy,” CEO Satya Nadella said in October. “Businesses — small and large — can improve productivity and the affordability of their products and services by building tech intensity.”
Home Depot Stock
Home Depot stock is up 52.9% so far this year. Shares climbed 0.5% to 406.22 on Tuesday.
The home-improvement retailer has a Composite Rating of 96, the strongest of this year’s top five Dow Jones stocks. HD stock’s EPS Rating is 87.
Home Depot has benefited from the pandemic’s great-indoors boom, after more people embraced home-renovation projects.
“I know, for me, my list of things to do around my house is never-ending,” CFO Richard McPhail said at a conference this month. “And the imagination that our customers have, the fact that they’re leaning into projects … we see that not only in kind of the consumer side of demand but also the Pro side of demand.”
“This tells us that there’s great underlying demand to increase their standard of living through improving their home,” he continued.
Home Depot has had to contend with higher lumber costs, after demand from a tight housing market ran up against limited capacity at sawmills. But CFRA analyst Kenneth Leon, in a research note this month, said Home Depot “has executed in getting lumber and building products.”
Goldman Sachs stock is up 47% so far this year. Shares of the bank — still known for its large trading desk — were down 0.1% to 387.61 on Tuesday. Goldman stock was in a flat base with a 426.26 buy point.
Goldman Sachs stock and other bank stocks this year was buoyed by economic support from Washington, a steady flow of dealmaking and volatility in the markets, and commodities that kept clients engaged.
Shares of the bank have an 88 Composite Rating, on the weaker end of the Dow Jones stocks mentioned here. Their EPS Rating is 93. The stock is slightly off record highs put up last month.
UnitedHealth stock is up 43.4% so far this year. The large health insurer rose 0.7% to 502.94 on Tuesday, a new high.
UNH stock has an 87 Composite Rating, the lowest of the Dow Jones stocks mentioned here. Its EPS Rating is 81.
UnitedHealth last month said it expected the impact of the pandemic to be lighter than in 2021. However, it gave an initial 2022 earnings-per-share outlook of $21.10 to $21.60. That was below estimates.
The company last month also told Reuters that it was too early to gauge the omicron variant’s impact on that outlook. The pandemic has led to an increase in insurance claims and expenses for things like testing.
When UnitedHealth reported earnings in October, it reported growth in its UnitedHealthcare managed care division and its Optum health services division, as well as in Medicare Advantage customers and Medicaid members. The company at that time also raised its 2021 earnings-per-share forecast.
Profits earlier this year also took a hit as more people sought medical care after putting it off during lockdown last year.
Cisco stock is up 43.1% so far this year. The stock, up 0.2% to 63.53 on Tuesday, was extended from a double-bottom base.
Shares of the computer-networking giant have an 89 Composite Rating. Their EPS Rating is 64.
The company — known for making routers and switches for communications networks — is trying to draw more sales from subscription-based software and develop hybrid networks for customers that use both data centers and cloud computing.
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