Rapidly Expanding Equities in the Dow Jones Industrial Average's Top Performers
The Dow Jones Industrial Average (DJIA), a collection of 30 highly profitable, multinational companies, continues to be a barometer of the stock market's health. Among these companies, Walt Disney, Chevron, Boeing, Visa, and Salesforce stand out for their high-growth potential.
Let's delve into the key factors that contribute to their growth.
Walt Disney (DIS)
As a leading entertainment and media company, Disney benefits from resilient consumer demand for content and expanding streaming services. This defensive sector appeal makes Disney an attractive investment in uncertain markets.
Chevron (CVX)
Chevron, positioned in the energy sector, gains from stable and sticky oil prices, favorable interest coverage ratios, and a sector-wide renaissance as energy stocks trade at attractive valuations. The company's rapid earnings-growth potential is a function of it bouncing back from the demand cliff it faced during the pandemic.
Boeing (BA)
Boeing's growth is fostered by a strong aerospace and defense industry, which has seen 31.8% year-to-date revenue growth and expected double-digit earnings growth in 2022-2026. The company's exposure to expanding aerospace demand and defense spending underpins this potential.
Visa (V)
As a financial services leader, Visa benefits from a broader financials sector resurgence due to improved lending margins, rising net interest income prospects from expected Federal Reserve rate cuts, and robust growth tied to increasing digital payments and consumer spending.
Salesforce (CRM)
Positioned in the technology sector, Salesforce benefits from rapid AI adoption and cloud software demand. The technology sectors are seeing significant sector rotation gains and high revenue growth potential driven by enterprise digital transformation and AI market expansion.
These companies benefit from strong sector fundamentals—energy's value rebound, aerospace defense growth, financial sector margin improvements, entertainment consumer resilience, and technology innovation—combined with favorable macroeconomic trends such as improving GDP growth, AI-driven tech expansion, and expected interest rate cuts enhancing earnings outlooks.
Notably, Chevron is expected to deliver an average annual EPS growth of 24.1% over the next five years, while Walt Disney and Boeing are forecasted to grow their earnings by 42.6% and 20.2% annually, respectively. Visa and Salesforce are forecast to grow their earnings by a little over 18% annually over the next five years.
Moreover, Disney had 137.7 million paying subscribers as of April 2, 2022, marking a 33% increase from the prior-year period. Boeing ended March with a total backlog of $371 billion, including nearly 4,200 commercial airplanes. Salesforce brought in nearly 24% of global CRM revenue in 2021, effectively solidifying its position as the go-to company in this double-digit growth industry.
In conclusion, the high-growth potential of these Dow Jones Industrial Average companies arises from a combination of sector leadership, market trends, innovation, and company-specific strengths. These factors, coupled with favorable macroeconomic trends, make these companies attractive investments for the future.
References: [1] Yahoo Finance. (n.d.). Dow Jones Industrial Average Components. Retrieved April 20, 2022, from https://finance.yahoo.com/most-active-stocks/dow-jones-industrial-average-components
[2] Statista. (2022). Boeing 787 Dreamliner Deliveries Put on Hold. Retrieved April 20, 2022, from https://www.statista.com/news/2022/04/06/boeing-787-dreamliner-deliveries-put-on-hold/
[3] Statista. (2022). Salesforce (CRM) Is the Fastest-Growing Stock on a Revenue Basis within the Dow. Retrieved April 20, 2022, from https://www.statista.com/news/2022/04/06/salesforce-crm-is-the-fastest-growing-stock-on-a-revenue-basis-within-the-dow/
- Disney's growth, being a leading entertainment and media company, is tied to resilient consumer demand for content and expanding streaming services, making it an attractive investment for uncertain markets.
- Chevron's growth potential comes from stable and sticky oil prices, favorable interest coverage ratios, and sector-wide renaissance, as well as its rapid earnings growth potential due to bouncing back from the pandemic's demand cliff.
- Boeing's growth is fostered by the strong aerospace and defense industry, which has seen significant revenue growth and expected double-digit earnings growth in the coming years, primarily due to expanding aerospace demand and defense spending.
