6 Dow Stocks Ending 2011 With a Bang
With Europe's woes bringing the world's stock markets to the edge of another crisis and the MF Global scandal wreaking havoc on investor confidence here in the U.S., you might feel like 2011 is a year to forget. But you have to remember that even if the major market indexes are roughly flat to down for the year, the stock market is a market of stocks -- and plenty of those individual stocks had blockbuster years and are set to wrap up 2011 on a high note.
Today, I want to look at six stocks from the Dow Jones Industrials (INDEX: ^DJI) that seem like they're getting an early start on their New Year's celebrations. These stocks have all posted double-digit percentage gains for the year and are within a hair's breadth of their highs in 2011. Without further ado, here are those six Dow stocks:
Source: Yahoo! Finance. Prices as of Dec. 7 close.
As you can see, there's no overarching theme unifying these exceptional performers. Covering everything from consumables to big-box retail, mobile devices to the products and services needed for all sorts of modern technological wonders, these stocks reveal the enormous cross-industry breadth you'll find within the Dow. And while tech giants Intel and IBM are near their respective high points for the year, other Dow tech stocks don't come close to making the list. Fellow PC-dependent software maker Microsoft is down slightly for the year, and Hewlett-Packard has seen huge losses.
But each of these stocks has a story to tell. Let's take a quick look at what made 2011 a great year for these companies:
- Think IBM is just another PC maker? Think again -- the company has moved away from its old hardware focus to embrace the higher-margin IT services business. Big Blue has made some big buys to make a big play against Oracle in the cloud computing space.
- McDonald's is known the world 'round for its fast food, and its stock has gone straight up. In its most recent quarter, same-store sales figures rose throughout all three of its global geographic segments, with the highest growth in the Asia-Pacific/Middle East/Africa region.
- Intel is the undisputed kind of chips for PCs, but some have feared it's losing its edge in the ever-growing mobile market. But with strong demand for servers, surprisingly high PC demand in emerging markets, and new chips focused on tablets and smartphones starting to come on line, Intel isn't going to let upstarts like ARM Holdings get past Intel's dominant position in the chip market.
- Home Depot has struggled throughout the housing bust. But recent glimmers of hope for housing have started showing up on the home-improvement giant's bottom line, with a 12% jump in earnings on positive comps of 4.2% in its most recent quarter.
- Verizon has to be happy with the apparent failure of rival AT&T's merger with T-Mobile, allowing it to retain its commanding share of the U.S. mobile market. With Verizon buying more spectrum licenses recently, shareholders are expecting the company to keep expanding its wireless network.
- Wal-Mart hasn't had the best of times lately, with competition coming both from deeper-discount dollar stores as well as Internet retail giant Amazon.com. But this past quarter, the company finally ended a long streak of negative same-store sales. Although fears persist, Wal-Mart's stock has broken out of a long malaise.
Getting off on the right foot
Of course, just because these stocks have done well in 2011 doesn't guarantee that they'll see the same performance in 2012. But in business, momentum is everything -- and if these companies can sustain the momentum they've built this year, then they could continue to reward shareholders for a long time to come.
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At the time this article was published It looks like Fool contributor Dan Caplinger is having his year end with a bang, although he never counts his chickens before they've hatched. You can follow him on Twitter here. He doesn't own shares of the companies mentioned in this article. The Motley Fool owns shares of IBM, Microsoft, Wal-Mart, Intel, and Oracle, as well as calls on Intel. Motley Fool newsletter services have recommended buying shares of Intel, Amazon, Microsoft, Home Depot, Wal-Mart, and McDonald's, as well as creating bull call spread positions on Microsoft and Intel and a diagonal call position on Wal-Mart. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy never whimpers.