5 Top Dow Stocks With The Most Upside Potential
While the Dow Jones Industrial Average is less than four percent higher in the past 90 days, it is near its all-time high.
Among its top performing components, those up more than index average in the same period, analysts believe Coca-Cola, Disney, McDonald's, Nike and Verizon have the most upside potential, judging by their mean price targets.
The share price is more than three percent higher than a month ago and reached a new 52-week high last week. Coca-Cola (NYSE: KO) is launching a new brand, Coke Life, aimed at the health conscious but diet soda wary consumer. The stock has underperformed the S&P 500 and competitors PepsiCo and Dr Pepper Snapple over the past six months.
Of the 25 analysts who follow the stock and were surveyed by Thomson/First Call, 15 recommend buying shares, with six of them rating the stock at Strong Buy. The mean price target, or where analysts predict the share price will go in the next year, is more than five percent higher than the current share price. The dividend yield is near 2.9 percent.
The share price is up more than seven percent in the past 90 days, as well as more than 13 percent higher year to date. This entertainment giant plans to make the most of its Marvel and Star Wars acquisitions. Over the past six months, Walt Disney (NYSE: DIS) has outperformed competitors Time Warner and Twenty-First Century Fox.
Of the 28 analysts surveyed, 17 recommend buying shares and none rate it at Underperform. The analysts see a little headroom for the shares, as their mean price target is more than three percent higher than the current share price. That target would be a new multiyear high. The dividend yield is about 1.0 percent.
McDonald's (NYSE: MCD) shares have pulled back about two percent since reaching a 52-week high back in May. The company's offerings fared badly in a recent Consumer Reports fast-food survey. The stock has underperformed not only the S&P 500 over the past six months, but peer Yum! Brands as well.
For the past three months, the consensus recommendation of the analysts polled has been to hold shares of McDonald's. But a move to the mean price target would represent a gain of more than five percent for the shares. At least one analyst sees more than 15 percent further upside. The dividend yield is near 3.2 percent.
Nike (NYSE: NKE) shares have risen almost seven percent from 90 days ago, though it is still down fractionally year to date. The athletic apparel company recently posted strong quarterly results. Over the past six months, the stock has underperformed the broader markets but outperformed rival Adidas.
For at least three months, the consensus recommendation of the surveyed analysts has been to buy shares. A move to the mean price target would be a gain of more than eight percent. That consensus target would be a multiyear high as well. And the dividend yield is about 1.3 percent.
Shares saw an almost six percent gain in May, but since then they have traded mostly between $49 and $50. Germany recently cut ties with this telecom giant over NSA spying. Over the past six months, the stock's performance has been in line with that of competitor AT&T, but it has outperformed Sprint.
Ten of the 33 polled analysts rate the stock at Strong Buy, and 14 more also recommend buying Verizon Communications (NYSE: VZ) shares. Their mean price target is more than seven percent higher than the current share price, and it would be a new 52-week high for the stock. The dividend yield now is near 4.3 percent.
At the time of this writing, the author had no position in the mentioned equities.
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