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3 Dow Stocks to Buy Right Now

Christopher Vargas
We have highlighted five top-ranked stocks that have led the S&P 500's five-year run from 2,000 to 3,000.

The Dow Jones Industrial Average is currently up a little over 3000 points year-to-date. The index’s performance has been fueled by the strong month Wall Street has had in June. Which stocks are responsible for the recent rally this month has experienced? These three stocks are amongst the top of companies within the Dow Jones Industrial Average with the most “Buy” ratings from analysts. CNBC used FactSet to screen all of the stocks within the DJIA to filter out the stocks with the highest percentage of buy ratings compared with total ratings. These three stocks show tremendous potential to emerge from their respective industry as winners. The bullish sentiment felt by analysts towards these stocks further cement these stocks as solid picks for potential shareholders. Let’s see which of these beloved stocks look like standouts from the lot.

Chevron

Chevron Corporation CVX is one of the world's leading integrated energy companies, and is involved in virtually every facet of the energy industry. Chevron earned 16 Buy ratings out of its 22 total ratings for a Buy rating of 72.7% amongst analysts. The energy giant is currently sitting at a Zacks Rank #1 (Strong Buy) and has made some recent moves in the right direction. The stock is up almost 14% since January, fueled by a more than a 6% spike within the last four weeks. Chevron is coming off a solid quarter, surpassing our consensus estimate of $1.26 by 13 cents and garnering an EPS surprise of +10.32%. Zacks Consensus Estimates are projecting a 14.04% surge in earnings for the current quarter with a 1.22% jump in revenue. Our estimates are also calling for a 23% increase in earnings on the back of a 6.09% hike in sales for 2020.

Cisco Systems

Cisco Systems, Inc. CSCO is the worldwide leader in IT that helps companies seize the opportunities of the future by connecting the previously unconnected. The IT giant received 19 ‘Buy’ ratings out of 28 total ratings for a 67.86% Buy rating amongst analysts. Cisco is currently listed at a Zacks Rank #2 (Buy) and has also taken strides in the right direction. Shares are up over 25% year-to-date and the tech company is coming off a stellar quarter. Cisco was able to produce a positive EPS surprise and post 5.97% earnings growth with a 4.11% sales spike compared to the previous quarter. Our consensus estimates are predicting that this growth will continue for the current quarter, with a 17.14% gain in earnings on top of a 4.23% sales increase. The positive double-digit earnings growth continues into the following year. The tech company has been able to surpass our estimates the past four quarters and is looking to sustain this growth and validate the analyst optimism.

Visa

Visa V is the lone standout from the financial sector in terms of “Buy” ratings from analysts. The financial services stock was able to earn 36 Buy ratings out of its 39 total ratings. The company has had a spectacular year thus far, as it is up over 30%. Wedbush’s Moshe Katri expressed his enthusiasm about the stock’s ability to perform regardless of economic slumps, commenting that 50% of the company’s revenue base is “generated from a combination of transaction fees and other ancillary services that are less dependent on economic activity.” Katri followed this up by saying that the financial giant is adapting well and is obtaining a significant share of the business in electronic payments.

Visa is currently listed as a Zacks Rank #3 (Hold). Our Zacks Consensus Estimates are projecting the stock to see a 19.01% earnings gain to go along with a 11.53% revenue increase for the next quarter. Our estimates continue to call for double digit growth in earnings and sales through the following year. The shift from cash to electronic payments could catapult the stock to reach these estimates and even surpass them.

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