The Dow Jones Industrial Average is made up of 30 stocks considered tops in their industries. But naturally, some rank better than others based on the opinions of the analysts who cover them.
Here are the top five Dow Industrial stocks as ranked by a group of analysts.
- Market value: $495.5 billion
- Dividend yield: 0.6%
- Analysts’ average recommendation: 1.58 (Buy)
Although the pandemic greatly curtailed spending in a number of Visa’s (V, $232.31) categories – most notably travel and entertainment – those headwinds should now be in the past.
Indeed, the gradual economic reopening – and accelerating secular growth in cashless payments, helped by the perception that cash is “dirty” – make a solid bull case for Visa stock.
Piper Sandler upgraded Visa to Overweight (the equivalent of Buy) from Neutral (Hold) in early June, thanks to a return to post-COVID-19 normal and certain advantages over its largest competitor.
“We expect Visa to benefit more from a vaccine-driven U.S. recovery than Mastercard,” writes Piper Sandler analyst Christopher Donat in a note to clients.
“Visa generated 45% of its pre-pandemic revenue from the United States, compared to only 32% for Mastercard. We believe higher vaccine rates in the United States are already driving higher domestic activity, which we view as a prerequisite to future cross-border travel.”
The company is also getting in on the cryptocurrency craze.
“Visa looks to be an infrastructure provider and enabler for crypto transactions,” writes William Blair analyst Robert Napoli (Outperform).
“Visa is now working with 50 different digital currency platforms, up from the recently published 35.”
Longer term, as the world’s largest payments network, Visa is especially well-positioned to benefit from the growth of cashless transactions and digital mobile payments, analysts say.
Indeed, the Street expects Visa’s EPS to increase at an average annual rate of more than 20% over the next three to five years.
Twenty-one analysts rate the Dow stock at Strong Buy, 13 say Buy and three have it at Hold, according to S&P Global Market Intelligence. One analyst has a Sell rating on the name.