4 Best Performing Dow Jones Stocks YTD: Microsoft, Salesforce, Nike, and Apple
December 15, 2020 at 08:21 AM EST
The Dow Jones Industrial Average (DJIA) ended November at near record highs and hit a new all-time intraday high this month. Its upward momentum is largely driven by optimism surrounding the speedy development and roll out of COVID-19 vaccines. Microsoft (MSFT), Salesforce.com (CRM), Nike (NKE) and Apple (AAPL) are the best-performing stocks in the of DJIA. These stocks are well positioned to appreciate further in the upcoming months also based on their impressive revenue and earnings outlook.
The Dow Jones Industrial Average (DJIA) rallied to record levels in November, hitting 30,000 and wrapping up its best month in more than three decades as breakthroughs in vaccines, spurred an investor shift toward sectors that were hardest hit by virus induced shutdown. Although it dipped slightly at the beginning of the month owing to concerns related to wrangling in DC over a potential stimulus package, the DJIA hit its all-time intraday high yesterday.
The Food and Drug Administration’s COVID-19 vaccine authorization for emergency use in the United States marks a significant milestone in the path toward an economic recovery and the world’s potential return to the “old normal.” This progress could result in a big stock market rally in the coming months. While the whole entire market is bullish about the swift roll out of the first of potentially several vaccines, the best-performing stocks of the DJIA should be among the frontrunners.
Microsoft Corporation (MSFT), Salesforce.com Inc. (CRM), Nike, Inc. (NKE) and Apple Inc. (AAPL) are four such DJIA stocks that are expected to hit new highs going into 2021 based on their solid revenue and earnings growth.
Microsoft Corporation (MSFT)
MSFT is one of the most prominent and successful players in the technology industry. Operating in through three segments — Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The company’s products have thrived, buoyed by demand for internet-based software and cloud services needed to accommodate a shift to remote working during the COVID-19 crisis.
On December 10th, MSFT and Deutsche Telekom Group announced a seven-year strategic partnership to help enterprises and individual customers accelerate digitalization and enhance productivity. This will enable MSFT to accelerate its innovation and deliver high-quality services based on customer demands.
The company has recently collaborated with Johnson Controls to digitally transform how buildings and spaces are conceived, built, and managed. MSFT also announced the availability of Microsoft Azure Digital Twins to support the entire ecosystem of building and device management technologies. This will allow MSFT to better meet the evolving needs of its customers.
MSFT’s revenue has increased 12.4% year-over-year to $37.20 billion in the fiscal first quarter ended September 30, 2020. Revenue from its the intelligent cloud segment increased 19.7% year-over-year to $13 billion, driven by growth in consumption-based services. And net income rose 30.1% from its the year-ago value to $13.90 billion, while EPS has grown grew 31.9% year-over-year to $1.82.
The consensus EPS estimate for the current quarter ending December 30, 2020 represents indicates an 8.6% improvement from the year-ago value. Moreover, MSFT has an impressive earnings surprise history, with the company beating consensus EPS estimates in each of the trailing four quarters. The consensus revenue estimate of $40.20 billion for the current quarter indicates an 8.9% growth from the same period last year. The stock has gained 35.8% year-to-date.
How does MSFT stack up for the POWR Ratings?
A for Trade Grade
B for Buy & Hold Grade
A for Industry Rank
B for Overall POWR Rating.
The stock is ranked #31 out of 98 stocks in the Software – Application industry.
Salesforce.com Inc (CRM)
CRM is involved in the development of cloud computing solutions for businesses. The company’s primary focus is on customer relationship management. In addition, it provides professional services and education services, including instructor-led and online courses, and support and adoption programs.
On December 2, the company introduced Salesforce Hyperforce to deliver the Sales Cloud, Service Cloud, Marketing Cloud, and Commerce Cloud securely and reliably on major public clouds. This launch is expected to accelerate CRM’s global customers' digital transformations and empower them to grow fast on their trusted platform.
CRM recently announced that its AI powered Salesforce Einstein can now deliver more than 80 billion predictions per day across all solutions. The company has also launched Revenue Cloud, which is aimed at helping businesses maximize their revenues.
CRM’s revenue increased 20% year-over-year to $5.42 billion in the third quarter ended October 31, 2020. Cash flow from operations grew 14% from the year-ago value to $0.34 billion, while operating income rose 244.6% from the prior-year quarter to $224 million. Gross profit increased 19.1% year-over-year to $4.03 billion over this period.
The consensus EPS estimate for the current quarter ending December 2020 represents indicates a 13.6% improvement from the year-ago value. Moreover, CRM has an impressive earnings surprise history, with the company beating consensus EPS estimates in each of the trailing four quarters. The consensus revenue estimate of $5.68 billion for the current quarter indicates a 17.2% growth from the same period last year. The stock has gained 36.1% year-to-date.
Nike, Inc. (NKE)
NKE, a sports footwear and apparel giant, has managed to retain the top spot within its industry for many years. The company’s online business is booming as consumers are turning to its website and app to shop for sneakers and workout apparel, even during the pandemic.
Earlier this year, NKE announced senior leadership changes in the company to support Consumer Direct Acceleration. This strategic leadership change will allow the company to accelerate its digital transformation across all operating segments and enhance client experience.
Nike has stepped up its direct-to-consumer online strategy amid the pandemic, developing its workout app to drive digital sales. The company’s direct sales have increased 13% year-over-year (on a currency-neutral basis) to $3.70 billion in the fiscal first quarter ended August 31, 2020. Its net income grew 11% from the year-ago value to $1.50 billion, while EPS rose 10% year-over-year to $0.95.
The consensus EPS estimate of $0.75 for the next quarter ending February 2021 indicates a 41.5% increase year-over-year. And the consensus revenue estimate of $10.80 billion for the next quarter indicates a 6.9% increase from the same period last year. The stock has gained 34.5% year-to-date.
NKE’s strong fundamentals are reflected in its POWR Ratings. It has a “Strong Buy” rating with an “A” for Trade Grade, Buy & Hold Grade, Peer Grade and Industry Rank. It is ranked #1 out of 34 stocks in the Athletics & Recreation industry.
Apple Inc. (AAPL)
AAPL, one of the Big Five companies in the U.S. information technology industry, designs, develops and sells consumer electronics, computer software, and online services. Its high-quality products drive customer loyalty that allows it to demand premium helps it demand premium prices for its products.
On December 8th, the company announced the launch of AirPods Max with high-fidelity audio, active noise cancellation, and spatial audio. AAPL has also recently introduced Apple Fitness+, which that gives users the option to work out anywhere and at any time with the screen that best suits them. These breakthrough products will broaden AAPL’s market reach and give a boost to its revenue.
AAPL has also recently unveiled a new line of Mac products. The company has introduced a new MacBook Air, 13-inch MacBook Pro, and Mac mini powered by the M1 Processors–its first generation of internally produced chips. It is hoped that the new features of the new lineup will allow the company to provide seamless experiences to all its customers and drive business growth.
AAPL’s revenue increased 1% year-over-year to $64.70 billion in the fourth quarter ended September 30, 2020. Cash flow from operating activities rose 16.3% from the year-ago value to $80.67 billion.
The consensus EPS estimate of $1.39 for the current quarter ending December 31, 2020 indicates an 11.2% improvement from the year-ago value. Moreover, AAPL has an impressive earnings surprise history, with the company beating consensus EPS estimates in each of the trailing four quarters. The consensus revenue estimate of $102 billion for the current quarter represents indicates an 15.3% growth from the same period last year. The stock has gained 36.1% year-to-date.
AAPL’s promising outlook is reflected in its POWR Ratings. It is rated a “Buy” with an “A” for Trade Grade and Industry Rank, and a “B” for Buy & Hold Grade. It is ranked #13 out of 30 stocks in the Technology – Hardware industry.
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MSFT shares were trading at $213.49 per share on Tuesday afternoon, down $0.71 (-0.33%). Year-to-date, MSFT has gained 36.81%, versus a 16.14% rise in the benchmark S&P 500 index during the same period.
About the Author: Imon Ghosh
Imon is an investment analyst and journalist with an enthusiasm for financial research and writing. She began her career at Kantar IMRB, a leading market research and consumer consulting organization.4 Best Performing Dow Jones Stocks YTD: Microsoft, Salesforce, Nike, and Apple appeared first on StockNews.com