Forget 3M, Buy These 4 Dow Jones Stocks Instead

St. Paul, Minn.-based 3M Company (MMM) is a diversified technology company that operates through four segments–Safety and Industrial; Transportation and Electronic; Health Care; and Consumer. MMM is a constituent of the Dow Jones Industrial Index. Morgan Stanley analyst Joshua Pokrzywinski downgraded MMM to underweight on February 18. The analyst’s bearish sentiment can be attributed to the company’s increased risk of Combat Arms liabilities and uncertain medium-term growth prospects. The stock has plunged 18.7% in price year-to-date and 19.2% over the past year.

MMM’s profit margins fell in the last quarter due to rising costs amid an uneven macroeconomic recovery. The company’s net income declined 4.7% year-over-year to $1.34 billion for its fiscal year 2021 fourth quarter, ended Dec. 31, 2021. The company EPS attributable to 3M common shareholders decreased 4.2% year-over-year to $2.31. MMM’s cash and cash equivalents declined marginally year-over-year to $4.56 billion.

Over the past year, Dow Jones Industrial Average index (DJIA) has gained 3.7%. However, the index has slipped 8.8% year-to-date due to surging market volatility and worsening geopolitical tensions.

Nonetheless, as the global economy continues to recover from pandemic-fueled uncertainties, the cyclical index is expected to recover in the coming months. So, we think it  advisable to add quality Dow Jones stocks Procter & Gamble Company (PG), McDonald’s Corporation (MCD), Amgen Inc. (AMGN), and The Travelers Companies, Inc. (TRV) to one’s portfolio.

The Procter & Gamble Company (PG)

PG provides branded consumer packaged goods in North and Latin America, Europe, Greater China, the Asia Pacific, the Middle East, India, and Africa. The Cincinnati, Ohio-based company operates in five segments: Beauty; Health Care; Baby, Feminine & Family Care; and Fabric & Home Care. It markets and sells products under the Head & Shoulders, Herbal Essences, Rejoice, Olay, Safeguard, Secret, Pantene, and Old Spice brands.

PG’s Gain brand introduced a new Gain Power Blast Dish Spray earlier this month. The dish spray is designed with Aroma Boost technology that helps users get a great clean with a better smell. The product launch is expected to cater to a vast customer base and boost PG’s profitability and revenues.

PG’s Oral-B brand announced the latest digital health innovations in January, including the Oral-B iO lineup with iO4 and iO5 brushes. This lineup comes with advanced technology and accessible solutions to improve oral care and health. This expansion of the iO lineup might help the company to reach global customers and boost revenue streams.

In the fiscal 2022 second quarter, ended Dec. 31, 2021, PG’s net sales increased 6.1% year-over-year to $20.95 billion. PG’s earnings before income taxes rose 7.4% year-over-year to $5.24 billion. Its  net earnings grew 9.1% year-over-year to come at $4.24 billion. Its net earnings attributable to Procter & Gamble increased 9.6% from the year-ago value to $4.22 billion, and the company’s net earnings per share increased 12.9% from its  year-ago value to $1.66.

The $18.75 billion consensus revenue estimate for its fiscal year 2022 third-quarter, ending March 31, 2022, represents 3.5% year-over-year growth. And the $1.31 consensus EPS estimate for the current quarter indicates 3.7% year-over-year growth. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in each of all the trailing four quarters.

Over the past year, the stock has gained 23.2% in price to close yesterday’s trading session at $155.96.

PG’s POWR Ratings reflect this promising outlook. The company has a B overall rating, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

PG has a B grade for Quality and Stability. Within the Consumer Goods industry, it is ranked #6 of 64 stocks. To see additional POWR Ratings (Value, Growth, Momentum, and Sentiment) for PG, click here.

McDonald’s Corporation (MCD)

Oak Brook, Ill.-based MCD operates and franchises McDonald’s restaurants in the U.S. and internationally. MCD’s restaurants provide a wide variety of food products and beverages. The company operates more than 39,200 restaurants worldwide.

On Sept. 23, 2021, MCD increased its quarterly cash dividend by 7% to $1.38 per share ($5.52 annually) and brought its fourth quarter dividend payout to more than $1 billion. The company also announced the resumption of its share repurchase program. With the combination of dividends and share repurchases, MCD is expected to reinvest in the business to drive profitable growth and return free cash flow to shareholders over time.

MCD’s total revenues increased 13.1% year-over-year to $6.01 billion in its fiscal fourth quarter, ended Dec. 31, 2021. MCD’s operating income increased 11.9% year-over-year to $2.40 billion. The company’s income before provision for income taxes grew 15.2% year-over-year to $2.11 billion. Its  net income rose 19% year-over-year to $1.64 billion, and its earnings per share increased 18.5% year-over-year to  $2.18.

Analysts expect MCD’s revenue for its fiscal 2022 first quarter, ending March 31, 2022, to be $5.63 billion, representing a 9.9% rise year-over-year. The Street expects MCD’s EPS to improve 15.7% year-over-year in the current  quarter to $2.22. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in three of the trailing four quarters.

Shares of MCD have increased 17.5% in price over the past year and closed yesterday’s trading session at $247.79.

MCD has an overall B rating, which translates to Buy in our POWR Ratings system. It has an A grade  for Quality and a B for Stability and Sentiment. It is ranked #15 of 43 stocks in the B-rated Restaurants industry. Click here to see MCD ratings for Growth, Momentum, and Value.

Amgen Inc. (AMGN)

AMGN in Thousand Oaks, Calif., develops, manufactures, and delivers human therapeutics worldwide. The company focuses on bone health, cardiovascular disease, inflammation, and neuroscience areas. AMGN’s products include Neulasta, Enbrel, Prolia, Xgeva, Otezla, Aranesp, Kyprolis, and Repatha. It serves healthcare providers, including physicians, dialysis centers, hospitals, and pharmacies.

On Feb. 2, 2022, AMGN announced a multi-year research collaboration and license agreement with Plexium, Inc. (Plexium) to identify and develop novel targeted protein degradation therapies. The partnership might expand its targeted protein degradation opportunities.

On Jan. 20, 2022, AMGN announced that LUMAKRAS (sotorasib) had been approved in Japan to treat KRAS G12C mutated, advanced, and non-small cell lung cancer (NSCLC). LUMAKRAS has now been approved in nearly 40 countries. This latest approval is expected to reach patients globally and boost the company’s profitability.

In its fiscal 2021 fourth quarter, ended December 31, AMGN’s total revenues increased 3.2% year-over-year to $6.85 billion. The company’s operating income grew 9.9% year-over-year to $3.01 billion. Its net income rose 21.7% from the prior-year quarter to $2.46 billion. In addition, the company’s earnings per share increased 26% from the year-ago value to $4.36.

AMGN’s revenues are expected to improve 3.9% year-over-year to $6.13 billion for its fiscal 2022 first quarter, ending March 31, 2022. Analysts expect AMGN’s EPS for its  fiscal first quarter to be $4.18, representing a 13% rise year-over-year. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in three of the four trailing quarters.

Over the past three months, AMGN’s shares have  gained 8.4% in price to close yesterday’s trading session at $221.00.

AMGN’s POWR Ratings reflect a strong outlook. The company has an overall rating of A, which translates to Strong Buy in our proprietary rating system. AMGN has an A  grade  for Quality and a B for Value. Among the 443 stocks in the Biotech industry, it is ranked #4. Click here to see the additional POWR Ratings for Sentiment, Momentum, Stability, and Growth for AMGN.

Click here to checkout our Healthcare Sector Report for 2022

The Travelers Companies, Inc. (TRV)

TRV offers commercial and personal property and casualty insurance products and services to individuals, businesses, government units, and associations in the U.S. and internationally. The New York City-based company operates in three segments: Bond & Specialty Insurance; Business Insurance; and Personal Insurance.

Yesterday, TRV acquired Trōv Technology, one of the most widely recognized insurtechs. Trōv's talented team members and embedded technology solutions will be positioned within TRV's Personal Insurance segment. This investment might enhance the experience of TRV’s customers, agents, and partners and promote the company's growth prospects.

Last month, TRV expanded its telematics auto insurance offering with the launch of IntelliDrivePlus. This app-based program calculates premiums based on driving behaviors and is now available to its Arkansas, Nebraska, and Ohio customers. The launch is expected to build on the momentum of the original telematics program IntelliDrive offered and boost the company’s revenue streams.

In its fiscal 2021 fourth quarter, ended Dec. 31, 2021, TRV’s total revenues increased 7.3% year-over-year to $9.01 billion. TRV’s net income rose marginally year-over-year to $1.33 billion, and its net income per share grew 5.3% from its year-ago value to $5.37. The company’s core income grew 2.1% year-over-year to $1.29 billion. And TRV’s core income per share increased 5.9% from the year-ago value to $5.20.

The $8.03 billion consensus revenue estimate for its fiscal year 2022 first quarter, ending March 31, 2022, represents 8.7% year-over-year growth. The $3.38 consensus EPS estimate for the current quarter represents 23.7% year-over-year growth. TRV has an impressive earnings surprise history; it surpassed the consensus EPS estimates in each of all the trailing four quarters.

TRV stock has gained 8.8% in price year-to-date and 15% over the past year. It closed yesterday’s trading session at $170.14.

The company has an overall B rating of B, which translates to Buy in our proprietary rating system. TRV also has a B grade for Momentum and Stability. Among the 28 stocks in the B-rated Insurance - Life industry, it is ranked #4. Click here to see the additional POWR Ratings for Value, Sentiment, Quality, and Growth for TRV.

PG shares were trading at $151.15 per share on Thursday afternoon, down $4.81 (-3.08%). Year-to-date, PG has declined -7.10%, versus a -12.34% rise in the benchmark S&P 500 index during the same period.

Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.

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