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5 Hottest Stocks in the Dow ETF

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Dow Jones has been hitting new record highs lately on an expected economic surge as cyclical sectors are outperforming after being beaten down badly amid the coronavirus crisis.

Investors are betting on the stocks that are poised to gain the most from a recovering economy backed by faster vaccine deployment, continued progress on more vaccines and the prospect of a further $1.9 trillion stimulus. The House passed the $1.9 trillion Biden stimulus bill, which includes provisions like $1,400 stimulus checks to most Americans, $300 per week in augmented unemployment benefits through early September, and $350 billion in state, local and tribal government aid. The bill is awaiting signature by President Joe Biden as soon as on Mar 12 (read: ETF Areas to Consider as Senate Passes COVID-19 Relief Bill).

Strong corporate earnings as well as signs of a healing labor market bode well for economic growth that led the outperformance of cyclical sectors. Further, the Fed’s accommodative stance and near-zero interest rates will continue to fuel growth.

Given this, SPDR Dow Jones Industrial Average ETF DIA tracking the Dow Jones Index also hit new record highs, gaining 6% so far this year. Let’s take a closer look at the fundamentals of DIA and its performance.

DIA in Focus

This is one of the largest and most popular ETFs in the large-cap space with AUM of $26.3 billion and an average daily volume of 3.5 million shares. Holding 30 blue chip stocks, the fund is widely spread across components with each holding less than 7.3% share. Information technology (21.1%), industrials (17.3%), healthcare (16.8%), financials (16.1%) and consumer discretionary (12.6%) are the top five sectors. DIA charges 16 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.   

Although most stocks in the fund’s portfolio have been in the green so far this year, we have highlighted the five best-performing ones:

Best Performing Stocks of DIA

Chevron Corporation CVX: This stock makes up for 2.3% allocation in the DIA portfolio and has gained about 32% this year. The stock has witnessed solid earnings estimate revision of 77 cents for this year over the past month. It is expected to record massive year-over-year earnings growth of more than 1000%. Chevron has a Zacks Rank #3 (Hold) (read: ETFs & Stocks Leading the Energy Rally This Year).

The Goldman Sachs Group Inc. GS: The stock has gained about 30% so far this year and occupies the second position in the fund basket with 6.8% share. It saw solid earnings estimate revision of 86 cents for this year over the past month and has estimated year-over-year earnings growth of 22%. The stock has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Walgreens Boots Alliance Inc. WBA: This stock takes 1% allocation in the fund’s basket and has gained 26.7% this year. The stock has witnessed no earnings estimate revision activity for the fiscal year (ending August 2021) in a month and has estimated year-over-year earnings growth of 0.6%. Walgreens Boots carries a Zacks Rank #3.

Intel Corporation INTC: This stock takes 1.3% allocation in the fund’s basket and has climbed about 25% in the year-to-date time frame. The stock has witnessed no earnings estimate activity for this year over the past month and has estimated year-over-year earnings decline of 6.6%. It has a Zacks Rank #2 (read: 10 Sector ETFs Flying Higher on a Recovering Economy).

JPMorgan Chase & Co. JPM: The stock has gained about 22% in the year-to-date time frame. It has seen positive earnings estimate revision of 10 cents for this year over the past month and has an expected earnings growth rate of 19.9%. JPMorgan currently has a Zacks Rank #3 and accounts for 3.1% exposure in the DIA portfolio.

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The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report
 
Intel Corporation (INTC) : Free Stock Analysis Report
 
Chevron Corporation (CVX) : Free Stock Analysis Report
 
Walgreens Boots Alliance, Inc. (WBA) : Free Stock Analysis Report
 
SPDR Dow Jones Industrial Average ETF (DIA): ETF Research Reports
 
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