The Dow Jones (^DJI) is home to corporate giants, but size alone doesn’t guarantee success. A few of these companies are struggling with weak fundamentals, paradigm shifts, or poor execution.
Not all Dow Jones stocks are worth owning - which is why we built StockStory to help you invest wisely. That said, here are two Dow Jones stocks positioned for long-term growth and one best left off your watchlist.
One Stock to Sell:
IBM (IBM)
Market Cap: $261.5 billion
With a corporate history spanning over a century and once known for its iconic mainframe computers, IBM (NYSE: IBM) provides hybrid cloud computing platforms, AI solutions, consulting services, and enterprise infrastructure to help businesses modernize their operations.
Why Are We Cautious About IBM?
- Sales were flat over the last five years, indicating it’s failed to expand this cycle
- Earnings per share lagged its peers over the last five years as they only grew by 3.3% annually
- ROIC of 11.5% reflects management’s challenges in identifying attractive investment opportunities
At $276.15 per share, IBM trades at 24x forward P/E. Read our free research report to see why you should think twice about including IBM in your portfolio.
Two Stocks to Buy:
Merck (MRK)
Market Cap: $210.1 billion
With roots dating back to 1891 and a portfolio that includes the blockbuster cancer immunotherapy Keytruda, Merck (NYSE: MRK) develops and sells prescription medicines, vaccines, and animal health products across oncology, infectious diseases, cardiovascular, and other therapeutic areas.
Why Should You Buy MRK?
- Unparalleled scale of $63.62 billion in revenue gives it negotiating leverage and staying power in an industry with high barriers to entry
- Adjusted operating margin expanded by 18.6 percentage points over the last two years as it scaled and became more efficient
- Free cash flow margin grew by 10.7 percentage points over the last five years, giving the company more chips to play with
Merck is trading at $84.02 per share, or 9.3x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Visa (V)
Market Cap: $666 billion
Processing over 829 million transactions daily and connecting billions of cards to 150 million merchant locations worldwide, Visa (NYSE: V) operates one of the world's largest electronic payments networks, facilitating secure money movement across more than 200 countries through its VisaNet processing platform.
Why Are We Backing V?
- Solid 11.2% annual revenue growth over the last five years indicates its offering’s solve complex business issues
- Share buybacks propelled its annual earnings per share growth to 16.8%, which outperformed its revenue gains over the last five years
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
Visa’s stock price of $336.82 implies a valuation ratio of 27.8x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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