Yesterday, we highlighted the first of our six AI-powered ProPicks strategies: Beat the S&P 500 - an actively managed equal-weighted portfolio that outperformed the US benchmark index by a juicy 670% over the last decade.
Today, however, our focus shifts to those looking towards a leaner risk exposure and juicy dividend yields with the 'Dominate the Dow' strategy.
Focused on industry-leading companies with solid fundamentals and a history of consistently growing yearly payouts, our AI-powered 'Dominate the Dow' strategy is proven to have beaten its benchmark index by nearly 400% over the last decade, with an annualized return of 19.1%, as seen in the chart below:
Source: InvestingPro ProPicks
Amid the 30 companies that compose the Dow Jones Industrial Average, 'Dominate the Dow' pinpoints the top 10 "blue chip" stocks that offer the best buy proposition at the moment.
The strategy is rebalanced on a monthly basis, guaranteeing that our users stay ahead of the curve amid shifting market dynamics and an ever-changing macroeconomic environment.
Now, let's take a deeper look at three of the stocks highlighted within the strategy as of now, namely Chevron , Caterpillar , and Amgen, to understand why they're likely to keep outperforming in the months ahead.
InvestingPro users can see the full strategy - along with the other five ProPicks strategies - on our ProPicks gallery page.
Not yet a Pro user? Subscribe now for an up to 60% discount for limited time only as part of our Extended Cyber Monday Sale!
*Readers of this article can enjoy an exclusive 10% discount on our annual Pro+ plan with coupon code DJS1, and a similar discount of 10% on the bi-yearly Pro+ plan by using coupon code DJS2 at checkout!
1. Amgen (AMGN)
- InvestingPro Health Label: Great
- InvestingPro Fair Value: Fair (18.9% Upside)
- Forward P/E Ratio: 19.3x
- Dividend Yield: 3.2%
Amgen (NASDAQ:AMGN) discovers, develops, manufactures, and delivers human therapeutics worldwide. It focuses on inflammation, oncology/hematology, bone health, cardiovascular disease, nephrology, and neuroscience areas.
Shares are up 5.2% in the past month and 7.3% year to date.
What do Wall Street analysts say?
According to analysts surveyed by InvestingPro, Amgen is Fairly valued with 5.3% Upside.
In November, Deutsche Bank initiated coverage on Amgen with a Hold rating, and Truist Securities upgraded the stock to Buy from Hold, writing:
"AMGN has historically shown the ability to grow mid-cycle assets, despite underwhelming initial launches. We highlight the record sales for mature brands, including Repatha, Blincyto and Prolia, which demonstrate AMGN's commercial execution. Their investment in derm and primary care sales force and DTC could continue to grow the topline”.
Key recent news
In October, Amgen reported Q3 earnings of $4.96 per share on revenue of $6.9B. Analysts were looking for $4.68 earnings on revenue of $6.92B.
Also in October, Amgen completed its acquisition of Horizon Therapeutics for $116.50 per share in cash, representing a transaction equity value of approximately $27.8B. The acquisition was completed after the U.S. Federal Trade Commission (FTC), which had initially sought to block the deal, granted conditional approval.
2. Caterpillar (CAT)
- InvestingPro Health Label: Great
- InvestingPro Fair Value: Fair (9.4% Upside)
- Forward P/E Ratio: 14.3x
- Dividend Yield: 2.1%
Caterpillar (NYSE:CAT) manufactures and sells construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives in the United States and internationally.
Shares are up 10.7% in the past month and up 9.3% year to date.
What do Wall Street analysts say?
According to analysts surveyed by InvestingPro, Caterpillar is Fairly valued with 2.1% Upside.
Most recently, in November, HSBC initiated coverage on Caterpillar with Hold rating, writing:
We like CAT for its leading position, but given the headwinds facing the US machinery market (North America contributes c50% of its revenue), we initiate at Hold.
Key recent news
In October, Caterpillar reported Q3 earnings of $5.52 per share on revenue of $16.8B. Analysts were looking for $4.80 earnings on revenue of $16.56B.
3. Chevron (CVX)
- InvestingPro Health Label: Good
- InvestingPro Fair Value: Fair (9.8% Upside)
- Forward P/E Ratio: 10.7x
- Dividend Yield: 4.2%
Chevron (NYSE:CVX) is a global leader in integrated energy and chemicals, operating in two main segments: Upstream and Downstream. The Upstream segment deals with the exploration, development, production, and transportation of crude oil and natural gas, including activities in liquefied natural gas.
The Downstream segment focuses on refining crude oil into petroleum products, manufacturing renewable fuels, etc. Additionally, it oversees the transportation of oil and refined products, and produces petrochemicals, plastics for industrial uses, and fuel additives.
Shares are up 1.6% in the past month and down 16.1% year to date.
What do Wall Street analysts say?
According to analysts surveyed by InvestingPro, Chevron is Fairly valued with 24.3% Upside.
Most recently, in November, Bernstein upgraded Chevron to Outperform from Market Perform, writing:
"Chevron upgraded on obvious catalysts... Permian clean up on aisle 5. Volumes sequentially down in 3Q but guided up in 4Q amidst a barrage of issues that veered toward mundane rather than impactful. Kazakh Kitchen Sink”.
In October, BofA Securities upgraded Chevron to Buy from Neutral, and Exane BNP Paribas upgraded to Outperform from Neutral.
Key recent news
In October, Chevron reported Q3 earnings of $3.05 per share on revenue of $54.08 billion. Analysts were looking for $3.60 earnings on revenue of $51.36B.
In the same month, the company announced an all-stock transaction to acquire Hess in a deal valued at $53B or $171 per share.
***
Subscribe now to see all the the picks and follow the 'Dominate the Dow' strategy for up to 60% off!
*Readers of this article can enjoy an exclusive 10% discount on our annual Pro+ plan with coupon code DJS1, and a similar discount of 10% on the bi-yearly Pro+ plan by using coupon code DJS2 at checkout!