HomeMarket NewsThe Ruling Trio of Dow Picks for Investing Gains in March 2024

The Ruling Trio of Dow Picks for Investing Gains in March 2024

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The Dow Jones Industrial Average is a venerable index, tracing its roots back to May 26, 1896. Over time, this index has been synonymous with America’s stalwart businesses possessing competitive edges. Today, the top Dow picks for investment uphold this tradition, showcasing elite global companies that epitomize resilience and stability.

The Call for Caution Amid Market Highs

Amidst record highs in the stock market, a prudent investor would be wise to consider the top Dow picks for investment. A surge of over 20% since November 2023 signals a potential market correction. Historical data from the Carson Group reveals that, on average, the market experiences a 14.3% drawdown in any given year since 1980.

While a 14% dip is palatable, riskier growth stocks might suffer more. In comparison, the top Dow picks, generally large-cap stocks, boast lower betas translating to lesser drawdowns during market corrections. Moreover, investors have viewed these companies as defensive assets owing to their robust financial standings in recent times.

The Reign of Amazon (AMZN)

Closeup of the Amazon logo at Amazon campus in Palo Alto, California. The Palo Alto location hosts A9 Search, Amazon Web Services, and Amazon Game Studios teams. AMZN stock

Source: Tada Images / Shutterstock.com

Amazon (NASDAQ:AMZN), the newest entrant in the Dow, presents a compelling case for investors. The North American retail sector of the company is witnessing improved returns after a phase of extensive fulfillment network expansion, leading to increased operating margins. Furthermore, the robust growth of Amazon Web Services (AWS), coupled with the burgeoning advertising arm, positions Amazon as a formidable force.

Leading in online retail in North America and dominating the global cloud computing landscape through AWS, Amazon’s strategic positioning and diversified revenue streams make it an attractive long-term investment within the Dow index.

American Express (AXP) – A Fortress of Stability

an American Express (AXP) credit card sticking out of someone's pocket

Source: Shutterstock

American Express (NYSE:AXP) has long been admired for its stability and high return on equity. Targeting affluent consumers, the credit card provider enjoys consistent growth rates fueled by robust consumer spending patterns. Amidst favorable economic conditions, American Express shines as a reliable choice for investors seeking resilience and steady returns.

Boasting endorsement from investment guru Warren Buffet and delivering impressive financial performance, American Express remains a beacon of strength in the Dow stocks universe. Its attractive valuation and proven track record make it an appealing bet for investors eyeing long-term growth.

Merck (MRK) – A Prescription for Growth

The Resilience of Merck: A Prescription for Success in the Pharmaceutical Industry

Steady Growth Amidst Market Shifts

Merck, the pharmaceutical giant, has seen a commendable uptick of over 16% so far this year. Despite this surge, the company remains a promising investment opportunity. Trading at a forward price-to-earnings ratio of 15, Merck stands out as a lucrative bargain in the market. Furthermore, its robust oncology and vaccines portfolio positions it well for sustained growth in the ever-evolving pharmaceutical landscape.

Keytruda: The Backbone of Success

At the core of Merck’s success lies its blockbuster drug Keytruda, a revenue-generating powerhouse that has solidified its position as one of the best-selling drugs in the market. Notably, Keytruda witnessed a remarkable 21% surge in sales in 2023, reaching a staggering $25 billion. The drug’s popularity stems from its global demand for treating metastatic indications and the expanding range of approved uses.

Expansion into New Horizons

Keytruda’s success story continues to unfold with new approvals for treating a myriad of conditions. Recent authorizations in Canada for gastric cancer and in Europe for resectable non-small cell lung cancer are testament to its growing significance in the oncology landscape. Since its inception in 2014, Keytruda has garnered over 40 approvals for a multitude of cancer treatments.

Diverse Portfolio and Continued Innovation

Besides Keytruda, Merck boasts a portfolio of other blockbuster drugs like Gardasil, which raked in an impressive $8.9 billion in sales in 2023. The company’s commitment to innovation is evident through its substantial investment of $30 billion in research and development in 2023 alone, aimed at discovering cutting-edge drugs and vaccines for the future.

Promising Future Ahead

With an extensive range of innovative medications and vaccines gaining traction globally, supported by robust financial and operational foundations, Merck emerges as a top contender among the elite Dow stocks for investors seeking long-term growth prospects in the pharmaceutical domain.

This article was written by Charles Munyi. He is a seasoned writer with a rich background in various industries, including personal finance, insurance, technology, wealth management, and stock investing.

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