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Dow Outperforming in June: 5 of the Best Stocks in the ETF

Sweta Killa

The Dow Jones is on track to record its best June in 80 years, having gained nearly 7% so far this month. The impressive rally came on the back of hopes of monetary easing policies at home and abroad that re-instilled confidence in riskier assts.

In its FOMC meeting set to conclude later in the day, the Fed is expected to lay the foundation of interest rate cut this year given the effects of a trade war on the economy. Lower interest rates will keep borrowing cost down, thereby resulting in higher consumer spending and rise in economic activities. Additionally, recovery in U.S. housing market, U.S.-Mexico deal and wave of mergers and acquisitions added to the strength.

Further, possible resumption of trade talks between the United States and China later this month have driven sentiments lately (read: Best ETF Ideas for the Second Half of 2019).

Given this, SPDR Dow Jones Industrial Average ETF DIA tracking the Dow Jones has gained nearly 7% so far this month. Let’s take a closer look at the fundamentals of DIA and its performance.

DIA in Focus

With AUM of $20.8 billion, DIA holds 30 stocks in its basket with each security holding no more than 9.2% share. The fund is widely spread across sectors with industrials, information technology and financials being the top three. It charges 17 basis points in fees per year from investors and trades in heavy volume of around 4.1 million shares a day on average. The fund has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.

Though most of the stocks in the fund’s portfolio pushed the ETF up, we have highlighted the ones that have led from the front. Here are the five best-performing stocks in the ETF with their respective positions in the fund’s basket:

Top Performing Stocks of DIA

Apple Inc. AAPL: The stock has jumped 13.3% so far this month and holds the fifth position in DIA, accounting for 5% share. It carries a Zacks Rank #3 (Hold) and has a VGM Score of B. The stock has seen no earnings estimate revision for the current fiscal year (ending September 2019) over the past month. Its earnings are expected to decline 3.6%. The stock falls under a top-ranked Zacks industry (top 21%) (read: Tech Stocks Log Seven-Year Best Spell: ETF Winners).

The Boeing Company BA: The stock has gained about 9.4% so far this month. It has seen negative earnings estimate revision of six cents in a month for this year. Its earnings are expected to decline 10.2%. The stock belongs to a top-ranked Zacks industry (top 27%) and takes the top spot in DIA portfolio with 9.2% exposure. Boeing currently has a Zacks Rank #3 and VGM Score of C.

Home Depot Inc. HD: This stock holds the third spot in the fund’s basket with 5.4% allocation and has gained 9.3% so far this month. The stock has seen positive earnings estimate revision of 4 cents for the fiscal year (ending Jan 2020) over the past month and has an estimated year-over-year earnings growth of 2.12%. HD belongs to a top-ranked Zacks industry (top 27%). It has a Zacks Rank #3 and a VGM Score of A (read: U.S. Homebuilder Sentiment Data Soft in June: ETFs in Focus).

Microsoft Corporation MSFT: This stock takes the thirteenth spot and accounts for 3.4% of the assets in the fund’s basket. It has gained 9.3% and witnessed positive earnings estimate revision of a penny for the current fiscal year (ending Jun 2020) in a month. Its earnings are expected to increase 11.24% year over year. Microsoft has a Zacks Rank #2 (Buy) and a VGM Score of C. It belongs to a bottom-ranked Zacks industry (bottom 35%). You can seethe complete list of today’s Zacks #1  Rank (Strong Buy) stocks here.

NIKE Inc. NKE: The stock has risen 9.2% so far this month and has 2.1% exposure in the fund’s basket. It has seen negative earnings estimate revision of a penny for the fiscal year (ending May 2020) in a month and has an expected earnings growth of 18.72%. The company has a Zacks Rank #4 (Sell) and a VGM Score of C. It belongs to a top-ranked Zacks industry (top 35%).

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The Boeing Company (BA) : Free Stock Analysis Report
 
The Home Depot, Inc. (HD) : Free Stock Analysis Report
 
Apple Inc. (AAPL) : Free Stock Analysis Report
 
Microsoft Corporation (MSFT) : Free Stock Analysis Report
 
SPDR Dow Jones Industrial Average ETF (DIA): ETF Research Reports
 
NIKE, Inc. (NKE) : Free Stock Analysis Report
 
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