Google parent Alphabet (GOOGL) will replace Verizon Communications (VZ) in the Dow Jones Industrial Average at the opening of trading on Monday, June 29, making the 30-stock bastion of blue chip companies increasingly exposed to all things digital.

Alphabet is best known to consumers as the operator of Google and YouTube, but as S&P Global notes, GOOGL's diversified portfolio spans advertising, cloud infrastructure, artificial intelligence, hardware, self-driving cars and healthcare technology.

"Adding Alphabet will broaden and strengthen the DJIA's exposure to these dynamic areas of the U.S. economy," S&P Global said in a press release. "Its larger market capitalization and share price, together with the breadth of its businesses, make it a more representative Communication Services constituent in the DJIA."

The move refers to Alphabet's Class A shares. The Class C shares (GOOG) will not be in the Dow.

Telecom giant Verizon, which has been in the Dow since 1984, sounds like a pretty poky business by comparison. Apple (AAPL) replaced AT&T (T) in the Dow in 2015. You may notice a pattern here.

S&P Global notes that Verizon represents only one-half of one percentage point of the DJIA due to its low share price. The Dow is a price-weighted index, and thus "persistently lower-priced stocks have an immaterial impact on the index," S&P Global said.

As much interest as such events generate, being tapped for the Dow is more symbolic than material. After all, the S&P 500 is the main benchmark for U.S. equity performance. That's why the total amount of money passively tracking the index comes to around $12 trillion.

For example, the largest exchange-traded fund (ETF) in the world, the Vanguard S&P 500 ETF (VOO), has more than $1.7 trillion in assets under management alone. A comparable product for the DJIA, the State Street SPDR Dow Jones Industrial Average ETF Trust (DIA), holds just $43 billion in assets under management.

Lastly, as noted above, the Dow is weighted by price rather than by market cap. Although GOOGL has an outsized influence on the movements of cap-weighted benchmarks, such as the S&P 500, Nasdaq Composite and Nasdaq-100, at current prices, GOOGL will be as material to the DJIA as, roughly, Sherwin-Williams (SHW).

Nevertheless, the blue-chip average will now include many of the biggest names among tech and communication services stocks: Apple, Amazon.com (AMZN), Nvidia (NVDA) and Microsoft (MSFT), as well as Salesforce (CRM), Cisco Systems (CSCO) and International Business Machines (IBM).

Is GOOGL stock a Buy?

GOOGL joining the Dow is not in and of itself a reason to buy the Magnificent 7 stock. Nothing about its fundamentals has changed. And while shares are currently in a 15% drawdown from their May peak, Wall Street remains bullish.

Of the 63 analysts covering GOOGL surveyed by S&P Global Market Intelligence, 42 rate it at Strong Buy, 14 say Buy and seven call it a Hold. That works out to a consensus recommendation of Strong Buy.

The Street's investment case for GOOGL comes down to AI. (Duh.)

"Alphabet remains at a minimum competitive, if not a leader, in the development of generative AI, the rapidly developing and perhaps disruptive new computing paradigm," writes Argus Research analyst Joseph Bonner, who rates shares at Buy. "We continue to like Alphabet's underlying businesses and believe that GOOGL shares are attractively valued given the company's growth runway."

The bottom line: If you liked GOOGL before its accession to the bluest of blue-chip clubs, there's no reason to change your mind. But don't buy it just because it's a better fit for the Dow Industrials than Verizon.

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Longtime shareholders in Micron Technology (MU) used to be longtime sufferers. Not anymore.

The company for decades plodded along in the volatile, low-margin business of making computer memory chips. That's a tough racket. Chips are a commodity. They're cyclical. Meanwhile, chipmakers have to constantly plow cash into research and development — to say nothing of capital expenditures — just to keep pace with peers.

Micron escaped its formerly poky past thanks to the era of artificial intelligence (AI). The ongoing build-out of AI infrastructure isn't just creating massive demand for specialized chips from the likes of Nvidia (NVDA); it's also fueling a run on companies that supply storage. Demand for Micron's wares — Dynamic Random-Access Memory (DRAM), NAND Flash memory, Solid-State Drives (SSDs) and Ultra High Bandwidth Memory (HBM) – has absolutely exploded.

The once-ugly duckling is now a swan. And with shares up more than 850% over the past year, MU stock is no longer a long-term laggard. Indeed, it's been an improbably good bet for truly patient investors.

The lone major American computer memory manufacturer is one of the industry's "Big Three." It competes on the global stage with South Korean heavyweights Samsung (SSNLF) and SK Hynix (HXSCL). And business has never been better.

That's not too shabby for a company that was founded in the late 1970s in the basement of a dental office in Boise. Along the way, Micron helped lead the way in the development of memory chips, demonstrating a particular strength in increasing density. With more than 60,000 patents, it's an engineering powerhouse.

But the grim realities of relentless R&D and capital expenditures in an industry where chip prices regularly plummet made Micron a tough stock to love. Anyone who couldn't stomach prolonged drawdowns of anywhere from 40% to 70% did not belong in the name.

The bottom line on MU stock?

Micron's red-hot run has done wonders for its returns over every standardized investing period you care to look at. For its entire life as a publicly traded company, MU generated an annualized total return (price change plus dividends) of almost 21%. That beats the S&P 500 by about 11 percentage points.

More recent results are simply stupendous. Over the past three years, MU returned 133% vs 23% for the broader market. The five-, 10- and 15-year return periods delivered massive outperformance as well.

Which brings us to what $1,000 invested in Micron stock 20 years ago would be worth today.

Have a look at the above chart and you'll see that a thousand bucks invested in MU two decades ago would today amount to almost $57,000. That's good for an annualized return of nearly 23%.

By comparison, the same sum socked away in an S&P 500 index fund would be worth about $8,600 today – or 11.4% annualized.

Will the good times keep rolling for this darling of an AI play? Wall Street sure thinks so.

"This is the memory bottleneck trade where the company can't nearly supply the backlog of orders," writes David Miller, chief investment officer at Catalyst Funds. "AI workloads need a huge amount of high bandwidth memory and storage. Micron gives you a way to play that part of the AI buildout at a reasonable forward earnings multiple."

Miller's views are widely shared. Of the 44 analysts covering MU stock surveyed by S&P Global Market Intelligence, 39 rate it at Strong Buy, nine say Buy and four call it a Hold. One analyst rates it at Strong Sell. Nevertheless, that works out to a consensus recommendation of Strong Buy, with high conviction to boot.

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Mastercard (MA) shareholders might not be too thrilled with the stock's more recent run, but few names have treated buy-and-hold investors to better returns over the long haul.

The world's second-largest payments processor has lost some of its luster over the past few years, but that's more to do with the legal and regulatory landscape than the company's operations. Threats to Mastercard's duopoly with Visa (V) are overblown, bulls say, and shares are priced for future outperformance for patient investors.

Buy-and-hold types who've been in the blue chip stock for ages can attest to Mastercard's strength. And while its competitive moat might not be quite as wide as it once was, the company's global brand remains as powerful as ever.

That's no small feat. A firm that was launched more than 50 years ago by a consortium of regional banks to compete with Visa today operates in more than 210 countries and territories. Nearly 40 million businesses accept Mastercard credit cards, of which there are 3 billion in circulation.

Payments processors aren't all that sexy, but Mastercard has indeed notched some nifty wins for capitalism. In the 1980s, the company issued the first international payment card in the People's Republic of China, as well as in what was then the Soviet Union.

Mastercard also has a history of innovation in security features, pioneering the now-standard practice of putting laser-etched holograms on cards. Later, it spearheaded the global rollout of the chip technology that today makes cards far more secure.

But investors were best served by the company's transition from a bank-owned cooperative to a publicly listed company in 2006. Anyone who invested in Mastercard during those early post-IPO days should have no problem paying off their purchases.

True, shares are lagging the S&P 500 by a wide margin over the past year or so. MA hasn't kept up with the broader market over the past half-decade either. Partly, that's a function of the way the tech sector — and all things related to artificial intelligence (AI) — have soared since ChatGPT debuted at the end of 2022.

MA is also contending with industrywide concerns. Persistent scrutiny of swipe fees has been a headwind for years. And now, the bipartisan Credit Card Competition Act of 2026 threatens Mastercard and Visa's lucrative duopoly. Calls to cap interest charges, while unworkable, are also spooking investors. (Shares in Visa have likewise underperformed the market for years now.)

You can see these anxieties playing out in Mastercard's valuation. Shares currently trade at less than 22 times estimated earnings. That's 20% lower than their five- and 10-year averages. A stock that once commanded hefty premiums thanks to its high operating margins (nearly 60%) and wide competitive moat has been repriced to reflect rising risks.

Interestingly, Berkshire Hathaway (BRK.B) sold its stakes in both Mastercard and Visa during the first quarter of 2026. The payments processors had been a couple of Warren Buffett's favorite stocks since 2011. Apparently, CEO Greg Abel, who is now calling the shots, sees things differently. Make of that what you will.

The bottom line on MA stock?

As noted above, Mastercard stock has been disappointing for more recent investors. Shares lag the broader market on an annualized total return basis (price change plus dividends) over the past one-, three- and five-year periods. Heck, over the past 52 weeks, MA stock is off about 4% vs a 30% gain for the S&P 500.

Beyond those recent periods, however, the returns have been priceless.

Over the past decade, MA stock leads the broader market by almost 3 percentage points. Over the past 15-year period, it beats the S&P 500 by more than 7 points.

Which brings us to what $1,000 invested in Mastercard stock 20 years ago would be worth today. Spoiler alert: a lot.

Have a look at the above chart and you'll see that a thousand bucks invested in MA stock two decades ago would today amount to almost $121,000. That's good for an annualized return of more than 27%.

By comparison, the same sum socked away in an S&P 500 index fund would be worth about $8,600 today – or 11.4% annualized.

That's remarkable outperformance. Happily for bulls, Wall Street analysts think Mastercard is priced to resume its winning ways.

"Solid quarterly earnings again underscored the resilience of MA's operating model amid a more mixed payments and macro backdrop," writes BofA Securities analyst Matthew O'Neill, who rates shares at Buy. "The underlying constant currency demand outlook remains intact, supporting confidence in Mastercard's long-term earnings durability and capital return profile."

O'Neill has plenty of company on the Street. Of the 39 analysts covering MA stock surveyed by S&P Global Market Intelligence, 29 rate it at Strong Buy, seven say Buy and three call it a Hold. That works out to a consensus recommendation of Strong Buy, with high conviction to boot.

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Target (TGT) is one of the oldest and most iconic brands in American retail, but shares in the national discount chain have been a bad buy-and-hold bet for ages.

The big-box chain that came to define the concept of "cheap chic" traces its roots to a single family-owned department store in the early days of the 20th century. Six decades later, a rapidly expanding middle class in the midst of the baby boom drove consumer demand for one-stop shopping at value prices. It's no coincidence that Target shifted to a discount format at the same time that Walmart (WMT) and K-Mart entered the market.

A merger and decades of expansion set Target up to be the comparatively upscale alternative to Walmart during the heyday of big-box chains at the end of the 20th century. Whereas Walmart's slogan was "Always Low Prices, Always," Target led with "Expect More. Pay Less."

By the beginning of the 21st century, the Minneapolis-based chain was a certified national retail behemoth. And then things started to go wrong.

The onslaught of Amazon.com (AMZN) and other e-commerce companies took a toll on all brick-and-mortar retailers. Chronic underinvestment in its digital strategy caused Target to fall far behind Walmart in the rapidly growing channel. Today, Walmart is the second-largest U.S. e-commerce retailer after Amazon – albeit a distant second. Target, meanwhile, ranks fifth.

A massive data breach in 2013 that exposed the financial information of as many as 110 million Target customers certainly did the company no favors. Even worse was Target's abortive expansion into Canada. The foray, which lasted only two years, ended in 2015 with the company shuttering 133 stores and taking a $5.4 billion quarterly loss.

Target's product mix also makes it more sensitive to economic ups and downs. Where Walmart's and Costco's (COST) top lines benefit from consumer staples that tend to hold up better when consumer spending slows down, Target depends more on discretionary items. Food, toilet paper and diapers are more recession-proof than apparel and consumer electronics.

More recently, Target's margins have been hampered by shrink – the loss of inventory due to theft, damage or administrative error – and tariffs. A decade ago, the company enjoyed gross profit margins north of 27%, or more than two percentage points higher than they run today.

It should come as no surprise that a turbulent couple of decades haven't been great for TGT stock.

The bottom line on TGT stock?

True, Target is a dividend-raising machine. Equity income investors have seen their payouts rise annually for more than five decades. As a member of the S&P 500 Dividend Aristocrats, there's no doubt that TGT is one of the best dividend stocks for dependable dividend growth.

Sadly, a poor track record of price appreciation wipes out the benefit those dividends contributed to shareholders' total returns.

For its entire life as a publicly traded company, Target generated an annualized total return (price change plus dividends) of just 5.4%. That lags the S&P 500 by more than 5 percentage points.

And while the consumer staples stock is up 38% over the past 52 weeks – vs 31% for the broader market – every other standard time frame is a dud. Shares in TGT generated negative total returns over the past three- and five-year periods. As for the past 10- and 15-year periods, TGT lags the S&P 500 by wide margins.

Which brings us to what you'd have if you invested a grand in TGT stock a couple of decades ago.

Spoiler alert: not nearly enough.

Take a look at the chart above and you'll see that if you put $1,000 into TGT stock 20 years ago, it would be worth about $3,900 today. That's good for an annualized total return of 7%.

The same sum sitting in a low-cost S&P 500 index fund over the past two decades would be worth almost $8,000 today, or 10.8% annualized.

There's no way around it: Target has been a buy-and-hold bust for truly long-term investors.

As for where TGT stock goes over the next 12 months or so, Wall Street is very much split on the name. Of the 37 analysts covering the stock surveyed by S&P Global Market Intelligence, 9 call it a Strong Buy, two say Buy, 23 have it at Hold and three rate it at Sell. That works out to a consensus recommendation of Hold.

More Stocks of the Past 20 Years

• If You'd Put $1,000 Into Walmart Stock 20 Years Ago, Here's What You'd Have Today
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Warren Buffett likes to say that price is what you pay, value is what you get. But that doesn't mean blindly indexing to value stocks is a path to long-term success.

After all, value stocks have broadly lagged growth stocks for more than a decade and there's no telling when they'll catch back up.

Besides, value is in the eye of the beholder. It's not for nothing that, on average, about 30% of the stocks in the benchmark Russell 1000 Value Index are also found in the Russell 1000 Growth Index.

"The remaining 70% are assigned to be either all growth or all value," per FTSE Russell.

Passive investors in a broad market index that tracks the S&P 500 needn't worry about the style differences between value and growth. Such distinctions are of more concern to tacticians and traders.

Nevertheless, there is something unusual about value's long-term slump.

First, a quick recap on value stocks vs growth stocks: Value stocks are equities that are perceived to be trading at a discount based on metrics such as price-to-book ratios, price-to-earnings ratios, dividend payout ratios and the like.

Growth stocks tend to trade at premiums to these metrics, as investors are willing to pony up for accelerating future free cash flows.

It's important to know that classifying stocks as growth or value is not a straightforward matter.

Russell assigns a growth and value weight based on its valuation criteria, which is how so many stocks find themselves represented in both benchmark indexes.

As FTSE Russell notes, what started out as a way for active managers to benchmark their performance based on their investment styles became a tool for professionals to make "unbalanced allocations based on their strategic or tactical views."

In other words, the benchmark growth and value indexes are not pure plays, and haven't been for decades.

"Pre-conceived notions of 'growth' and 'value' aren't always reflected in indexes labeled growth and value," writes Liz Ann Sonders, chief investment strategist at Charles Schwab. "That has been both exacerbated and emphasized in the post-pandemic era, especially for a sector like technology, which is traditionally thought of as dominating the growth sphere but now has a hefty weight in some value indexes."

Is value investing dead?

"Value investing is based on the premise that paying less for a set of future cash flows is associated with a higher expected return," writes the equity investing team at Dimensional Fund Advisors. "That's one of the most fundamental tenets of investing."

Over the long haul, value stocks have indeed outperformed growth stocks in the U.S., often by wide margins.

"Data covering nearly a century backs up the notion that value stocks — those with lower relative prices — have higher expected returns," Dimensional adds. "While disappointing periods emerge from time to time, the principle that lower relative prices lead to higher expected returns remains the same."

Given that mean reversion is a thing in both life and investing, value investors may be forgiven for expecting their stylistic preference to come back vs growth.

But it hasn't happened yet.

Have a look at the chart below to see the performance of the iShares Russell 1000 Value ETF (IWD) vs the iShares Russell 1000 Growth ETF (IWF) over the past decade to see how far the gap has widened on a total return basis (price change plus dividends).

Using these benchmark ETFs as proxies, we can see that growth returned more than 360% over the past 10 years vs less than 140% for value. That bucks historical trends in a big way. Since 1927, value stocks outperformed growth stocks by 4.4% annually in the U.S.

This doesn't mean value investing is dead. However, it might suggest that value investing via a broad index like the Russell 1000 Value Index isn't the best way to find value stocks. It isn't necessarily a good proxy for retail investors looking for cheap diversification to true value names.

Finding true value stocks is hard – just ask Warren Buffett. That said, value investors do have history on their side.

As Hartford Funds notes, "the performance of growth stocks and value stocks has been cyclical. This cyclical behavior highlights the benefits of having both types of investments in a portfolio."

Getting the balance and timing of such tactical allocations is generally best left to the pros.

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The Federal Reserve will keep short-term interest rates unchanged when it concludes its next meeting, experts say, as solid economic growth, moderating inflation and a "low-hire, low-fire" labor market support current policy.

Of more interest is how Fed Chair Jerome Powell handles the press conference following the release of the central bank's policy statement. The Fed's independence has come under question, and Powell is set to preside over just two more meetings before his term as Fed chief ends on May 15. While Powell could remain on the Fed board for the remainder of his full term, he could also choose to step aside entirely.

As for the state of the economy, fourth-quarter gross domestic product (GDP) is tracking at a strong growth rate of 5.4%, according to the Federal Reserve Bank of Atlanta's GDPNow model.

Meanwhile, the jobs market remains sluggish but steady. As for inflation, while it's still above the Fed's long-term target, recent readings have come in better than expected. Fears of a tariff-driven surge have thus far proven unfounded.

Matthew Luzzetti, chief U.S. economist at Deutsche Bank, suggests Powell’s press conference could veer into "non-economic issues," such as current threats to the Fed's independence. On the "fundamental" side, Luzzetti expects Powell to describe policy as "well positioned," as it is plausible to argue that rates are currently neutral.

"Powell might also sound somewhat more sanguine on the labor market, while still emphasizing downside risks," Luzzetti adds.

As of this writing, market participants expect the Fed's rate-setting committee, the Federal Open Market Committee (FOMC), to stand pat on the federal funds rate.

Indeed, as of January 26, interest rate traders assigned a 97% probability to the FOMC keeping the target rate steady at 3.5% to 3.75%, according to CME Group's FedWatch.

With the Fed set to leave rates unchanged at an increasingly complex time, we turned to economists, strategists and other experts for their thoughts on monetary policy going forward. Please see a selection of their commentary, sometimes edited for brevity or clarity, below.

Fed rate decision: what the experts say

"After three straight rate cuts last year, the Federal Reserve is widely expected to keep interest rates unchanged at the next meeting. We may see another dissent (in favor of an additional cut) from Governor Miran before his term ends on January 31, but the real focus will be on Chair Powell's press conference. Investors want to know whether this will simply be a one-meeting 'pause' or the beginning of a longer hold. Right now, the economy still looks surprisingly sturdy." – Larry Adam, chief investment officer at Raymond James

"We expect the Fed to hold rates steady and present a somewhat more upbeat view about the economy through the policy statement and Chair Powell's press conference. The statement is likely to upgrade the growth assessment to 'solid,' note tentative evidence that unemployment has stabilized, and hint at an improving balance of risks to the outlook." – Matthew Luzzetti, chief U.S. economist at Deutsche Bank

"Markets are now not really expecting a Fed rate cut until June, or the first meeting after Jay Powell has left the Chair. We remain a bit more dovish than the market, expecting three quarter-point trims this year. True, real GDP growth expectations are being lifted, but it's coming from better productivity, and the job market remains sluggish while core inflation is stable to lower." – Douglas Porter, chief economist at BMO Capital Markets

"We don't expect to learn a lot at the January FOMC meeting. The Fed is on hold but remains data dependent. The balance of risks around the two mandates hasn't changed much since December. Chair Powell's press conference might be dominated by questions about politics rather than policy. On the latter, however, market pricing creates risks of a dovish surprise." – Aditya Bhave, U.S. economist at BofA Securities

"We expect no policy change in the January meeting. Our base case anticipates 25 to 50 bps of additional easing this year, moving towards neutral and generally supporting our constructive economic and market outlook." – Lauren Goodwin, chief market strategist at New York Life Investments

"While no change in interest rates is expected, markets will be highly attentive to the tone of the statement and Chair Powell's press conference. Any adjustment in how the Fed characterises inflation, labour market conditions or downside risks to growth could quickly influence rate-cut expectations. A message that reinforces patience and acknowledges cooling momentum would likely support equities and pressure the dollar, while a more cautious or hawkish tilt could revive volatility across risk assets." – Daniela Hathorn, senior market analyst at Capital.com

"We expect the Federal Reserve to hold rates steady at the January FOMC meeting, following three consecutive rate cuts in 2025, as policymakers take time to assess the impact of past easing. Assuming inflation continues to trend lower and growth remains resilient, we see room for moderate rate cuts in 2026." – Gargi Chaudhuri, chief investment and portfolio strategist at BlackRock

"The FOMC is widely expected to leave the fed funds rate unchanged at its January meeting. We expect the post meeting statement and press conference to signal maximum flexibility as the Committee strives to keep its options open. Our forecast remains for two 25 bps rate cuts at the March and June meetings, but the risks to our forecast look increasingly skewed toward later and possibly less easing this year." – Sarah House, senior economist at Wells Fargo

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Berkshire Hathaway (BRK.B) is in a class by itself when it comes to really long-term outperformance. It's not for nothing that Warren Buffett, who will retire as CEO at the end of 2025, is known as the greatest long-term investor of all time.

BRK.B stock has been a market beater over the past 20 years, too, but all the millionaires Berkshire minted had skin in the game long before the turn of the century.

That's how compounding and the law of large numbers work.

But first, a quick recap of Berkshire Hathaway's history. The company was a struggling textile firm when Buffett took control in 1965. Over the ensuing years, Buffett converted it into a holding company, or a company that buys other companies.

Buffett's first target was an insurance company, and the insurance business continues to be at the core of Berkshire's operations today.

Insurance was especially attractive to Buffett because of float, or the money insurance companies hold between collecting premiums and paying out claims. Thanks to the float from Berkshire's insurance companies, Buffett had ample sources of capital to buy up or invest in other enterprises.

Today, Berkshire Hathaway comprises more than 60 wholly owned subsidiaries, including BNSF Railway, Geico insurance, industrial titan Precision Castparts and fast food chain Dairy Queen.

Meanwhile, the Berkshire Hathaway equity portfolio, with a market value of about $250 billion, includes major stakes in Apple (AAPL), Bank of America (BAC) and American Express (AXP), to name just a few.

Berkshire Hathaway has always been a long-term bet on the dynamism of the U.S. economy. It's also a low-beta stock, which means it tends to underperform in up markets and outperform in down markets.

And what that has added up to over the past 60 years is nothing less than astonishing. Since 1965, Berkshire stock has generated a compound annual growth rate of almost 20% vs 10% for the S&P 500.

What does that look like on a brokerage statement? Well, if you put $1,000 into Berkshire stock 60 years ago, it would be worth about $33 million today. The same sum invested in the S&P 500 would today be worth about $336,000.

Warren Buffett and his late partner Charlie Munger really did mint many a millionaire over the course of their long careers.

However, BRK.B's returns over the past 20 years, while good, have naturally been more modest.

After all, there's nothing like getting in on the ground floor.

The bottom line on Berkshire stock?

Although BRK.B stock outperformed the broader market by a wide margin over the past five years, it actually lagged the returns of the S&P 500 over the past one-, three-, 10- and 15-year periods.

If you go back 20 years, BRK.B, which doesn't pay a dividend, generated an annualized return of 11.2%.

That's not too shabby, but it leads the S&P 500, with dividends reinvested, by less than a percentage point. An active fund manager might be happy with such results, but it hardly means BRK.B stock was a path to riches in the 21st century.

Have a look at the above chart to get a sense of what BRK.B's returns would mean to your brokerage statement over the past couple of decades. They're just OK.

Indeed, if you put $1,000 into Berkshire stock 20 years ago, today it would be worth about $8,300. The same amount invested in the S&P 500 would theoretically be worth about $8,200 today.

With Warren Buffett set to step down at the end of 2025, some folks fear that Berkshire stock's best days are behind it. The reality is that Berkshire is now so big that it's unreasonable to expect anyone to repeat Buffett's historic run.

True, that doesn't mean BRK.B can't continue to be a market beater going forward. Wall Street is mostly bullish on the name, giving it a consensus recommendation of Buy, according to data from S&P Global Market Intelligence.

Nevertheless, BRK.B's era of generating truly outstanding returns would appear to be behind it – and that was true even before Buffett announced his retirement.

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Procter & Gamble (PG) is about as blue as a blue chip stock can be. Sadly for long-term shareholders, this battleship of a defensive dividend-paying name has delivered underwhelming returns vs the broader market for a very long time.

Founded in the first half of the 19th century, P&G has grown into the world's largest consumer products company by market value, boasting a vast portfolio of billion-dollar brands. From Tide laundry detergent to Crest toothpaste to Pampers diapers, today, P&G sells its wares in more than 150 countries.

Yet even as Procter & Gamble expanded its dominance in the U.S. and spread around the globe, it never wavered in its commitment to returning cash to shareholders through dividends. P&G has paid uninterrupted dividends since 1891.

Even more impressively, P&G has increased its payout every year for nearly seven decades. As a member of the S&P 500 Dividend Aristocrats, Procter & Gamble has more than earned its reputation as one of the best dividend stocks to buy for dependable dividend growth.

Between its dividend increases and the fundamental nature of its business — sales of toothpaste and diapers tend to hold up in tough times — P&G stock is considered a classic defensive name.

This Buy-rated Dow Jones stock has been a component of the blue-chip benchmark since 1932.

There's no questioning the company's illustrious history. P&G stock's past performance, however, isn't quite as distinguished.

The bottom line on PG stock?

There's no way around it: P&G stock has been a market laggard for ages.

To be fair, over its lifetime as a publicly traded company, P&G has delivered market-matching results. With a total return (price change plus dividends) of 10.8%, it's essentially tied with the S&P 500 over the same span.

The problem is that if you look at time frames more relevant to shareholders alive today, Procter & Gamble stock is a bust.

It lags the broader market on an annualized total return basis in the past one-, three-, five-, 10-, 15- and 20-year periods – and by painfully wide margins, too.

To get a sense of what this underperformance looks like on a brokerage statement, have a look at the above chart. It shows that if you put $1,000 into P&G stock 20 years ago, it would today be worth about $4,400. That's an annualized return of 7.8%.

The same thousand bucks invested in the S&P 500 would today be worth about $8,000 — or an annualized return of 10.9%.

Past performance is not a guarantee of future results, and Wall Street does mostly like P&G stock at current levels. Of the 24 analysts covering P&G surveyed by S&P Global Market Intelligence, 10 call it a Strong Buy, four rate it at Buy and 10 say Hold. That works out to a consensus recommendation of Buy — albeit with somewhat mixed conviction.

Speaking for the bulls, Argus Research analyst Taylor Conrad recommends buying shares on weakness.

"Despite higher raw material and distribution costs, the company continues to manage its margins with productivity initiatives," Conrad writes in a note to clients. "We also like P&G’s record of dividend growth and note that management’s 5% dividend hike in April showed confidence in future performance."

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It's no secret the market looks pricey by historical measures, but that doesn't mean there are no Buy-rated bargain stocks to buy.

We're all more than aware that the S&P 500 is trading at lofty valuations by a number of measures. How often have we been told that the market's forward price-to-earnings ratio (P/E) – the S&P 500 currently trades at 22 times next-12-months earnings – is perilously close to its historical high?

Indeed, as Savita Subramanian, head of U.S. equity strategy and U.S. quantitative strategy at BofA Global Research, notes: "On 19 of 20 metrics, the S&P 500 is trading at statistically expensive levels."

But that doesn't mean there are no bargains to be found. After all, as the cliche goes, it's not a stock market; it's a market of stocks.

To that end, we screened the S&P 500 for the best bargain stocks to buy, according to industry analysts. We sussed out high-quality names with cheap share prices on a relative valuation basis. We further limited ourselves to stocks scoring a rare consensus Strong Buy recommendation, according to data from S&P Global Market Intelligence.

We then dug into analyst research and recent returns to find three of the most promising names, which might surprise you. Tech and communication services stocks may get all the attention, but there's value to be found in the consumer discretionary, energy and materials sectors.

Hasbro

• Market cap: $11.6 billion
• Dividend yield: 3.4%
• Forward P/E: 15.8

Hasbro (HAS) has become something of a poster company for weathering trade shocks. The toymaker not only manufactures a significant portion of its products in China, but the Middle Kingdom is also a major market. Indeed, Hasbro recorded more than $1 billion in non-cash goodwill impairment charges this year due to the impact of tariffs.

And yet, shares have shaken off the shock, gaining more than 50% so far in 2025. Even better, analysts say Hasbro's valuation remains compelling, suggesting even more upside ahead.

"The company has consistently delivered on earnings and has topped estimates for the past seven quarters," notes Argus Research analyst Christine Dooley, who rates HAS stock at Buy. "It delivered again this quarter despite retailers delaying orders due to tariffs and economic uncertainty. The business is on track and fundamentals are good."

HAS stock goes for less than 16 times expected earnings – below its own five-year average P/E, and at a roughly 30% discount to the broader market, according to LSEG Stock Reports Plus. In addition to looking like a bargain, HAS offers an attractive dividend with an implied yield of 3.4%.

Of the 14 analysts covering the stock surveyed by S&P Global Market Intelligence, 10 rate it at Strong Buy, two call it a Buy and two have it at Hold. That works out to a consensus recommendation of Strong Buy.

SLB

• Market cap: $53.3 billion
• Dividend yield: 3.2%
• Forward P/E: 12.5

Bulls say SLB (SLB), the oilfield services giant formerly known as Schlumberger, has a unique ability to ride out subdued industrywide demand. True, shares are off about 5% so far this year, but that only makes the valuation more compelling.

Thanks to its $7.8 billion acquisition of ChampionX in July, and its diversification into offering digital services and data centers, SLB should be able to "navigate the environment until spending ramps back up," writes Susquehanna analyst Charles Minervino, who rates shares at Positive (the equivalent of Buy).

Accelerating international markets and pricing momentum provide upcoming catalysts to the energy stock, the analyst notes.

Meanwhile, SLB's price appears to be right. With a forward P/E of 12, SLB trades at a 25% discount to its own five-year average, as well as a discount of almost 50% to the broader market.

By price-to-sales, SLB trades at even steeper discounts to those benchmarks.

Then there's all the cash SLB is returning to shareholders. The company reaffirmed its plan to spend $4 billion on share repurchases and dividends in 2025, up from $3.27 billion in 2024.

Of the 30 analysts covering SLB, 19 call it a Strong Buy, nine say Buy and two have it at Hold. That translates to a consensus recommendation of Strong Buy.

Smurfit WestRock

• Market cap: $18.7 billion
• Dividend yield: 4.8%
• Forward P/E: 10.7

Smurfit WestRock (SW) shares have lost about a third of their value so far this year, but bulls argue that this leaves them trading at bargain-basement prices. After all, the company is still finding its feet.

SW was formed by the 2024 merger of Smurfit Kappa and WestRock Company, creating the world's largest paper packaging company. Smurfit WestRock's operations in 40 countries make it the revenue leader in the world of corrugated cardboard, containerboard, consumer packaging and more.

"We rate SW at Buy given its leading industry position in North American containerboard, allowing it to capitalize on the improving containerboard cycle, which we believe is entering a 'golden age' driven by balanced supply and demand," writes Truist Securities analyst Michael Roxland.

Moreover, SW expects $400 million in synergies (also known as cost cuts) as a result of the merger.

With a forward P/E of less than 11, SW trades at an 11% discount to its own five-year average, according to LSEG Stock Reports Plus. That valuation also represents a discount of 50% to the broader market. The dividend yield, at 4.8%, is pretty spicy compared to the S&P 500's yield of 1.2%.

Of the 16 analysts covering the materials stock, 11 rate it at Strong Buy and five have it at Buy. That works out to a consensus recommendation of Strong Buy.

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Analysts have been busy updating their discounted cash flow models and price targets for Nvidia (NVDA) after the most important AI company in the world failed to give the sort of blow-out revenue guidance Wall Street has come to expect.

Indeed, shares in NVDA, the world's second most valuable publicly traded company with a market cap in excess of $3 trillion, actually stumbled after posting Q3 results.

But then these sorts of things can happen when a stock is said to be priced for perfection.

Either way, it seemed like a good time to take a look at a few of the ways in which analysts' expectations have changed for NVDA stock in light of the company's latest guidance.

First, let's have a look at NVDA's price target. Although these targets are of limited utility, they do form the basis for declaring whether a stock is a Buy, Hold or Sell.

As of now, NVDA's average price target stands at about $170, up roughly 6% from the pre-earnings release target of about $160, according to data from S&P Global Market Intelligence.

NVDA's new average price target gives shares implied upside of about 20% over the next 12 months. The old price target – based off NVDA's previous level – gave the stock implied upside of about 13%.

It's hard to believe Nvidia has become a $3 trillion company because of its potential for 13% or 20% price upside over the next year or so. Heck, the stock nearly tripled over the past 52 weeks.

Price targets. Go figure.

Perhaps relative valuation can be more helpful.

Nvidia is cheap, relatively speaking

First, a caveat about valuation. While absolutely critical, valuation tends to play out on its own time frame. This time frame can be much longer than investors expect. Keep this in mind when looking at Nvidia, as the stock usually looks expensive and yet it keeps going up.

That said, NVDA's relative valuation does look increasingly compelling by some measures these days.

For one thing, while it's true that Nvidia changes hands at nearly 35 times analysts' average next-12-months earnings per share (EPS) estimate, this multiple represents a 20% discount to its own five-year average, according to data from LSEG Stock Reports Plus.

Perhaps more importantly, after updating their models, analysts' average long-term growth forecast now stands at more than 62%, per LSEG.

These revisions make NVDA look attractively priced once you consider how fast the stock is rising relative to its growth prospects. Indeed, by at least one metric – the price/earnings-to-growth (PEG) ratio – Nvidia stock looks very cheap on a relative valuation basis.

Here's why: since NVDA stock is trading at 35 times expected earnings and has a LTG forecast of more than 62, its forward PEG is 0.6. To put that in perspective, the S&P 500 trades at a PEG of 2.1.

By this measure, NVDA trades at a 70% discount to the broader market. That's not bad, but then Nvidia and the broader market are sort of apples and oranges.

That's why we want to look at Nvidia's PEG relative to its peers and itself. This gives us an idea of what sort of premium the market has been willing to pay for Nvidia's growth prospects in the past.

And what do we find? Bulls will be happy to know that with a PEG ratio of 0.6, Nvidia stock trades at a 70% discount to the semiconductor industry average.

Even more intriguing, however, is that NVDA stock also trades at a steep discount to its own five-year average. Indeed, per LSEG Stock Reports Plus, if Nvidia's PEG "returned to historical form," the stock would trade at $349.04.

That's not a price target, mind you, it's just some modeling. But it does give NVDA stock implied price upside of about 150% from current levels.

As for Wall Street's collective wisdom on this top-rated Dow Jones stock, of the 63 analysts issuing opinions on NVDA surveyed by S&P Global Market Intelligence, 47 call it a Strong Buy, 12 have it a Buy and four say it's a Hold.

That works out to a consensus recommendation of Strong Buy, making Nvidia one of the Street's top S&P 500 stocks to buy too.

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Tesla (TSLA) stock soared on the outcome of the 60th U.S. presidential election, helped in no small part by CEO Elon Musk's ardent support of Donald Trump, now the 45th and the 47th man to win the White House.

Few things have greater allure for investors than the sight of rising prices, which leads to the question: should you buy Tesla stock?

To answer this question, it helps to look around one's physical environment. Are you reading these words at a desk with, say, six monitors displaying changes in asset prices across the globe in real time? Are these numbers fluctuating between the colors of red and green?

If the answer is “no,” then no, you should not buy Tesla stock based on the outcome of the election. After all, the idea is to buy low.

Besides, retail investors who own diversified funds that track the S&P 500, the Nasdaq Composite and the Nasdaq-100 probably have enough exposure to TSLA already. The electric vehicle maker's market cap of more than $920 billion gives it ample weight in these benchmarks.

TSLA stock: The Street weighs in

But let's say you are a stockpicker. Is Tesla a buy at current levels?

Certainly industry experts who cover the stock intensely should know. The problem here is that Wall Street is heavily split on the name.

Of the 52 analysts covering TSLA stock surveyed by S&P Global Market Intelligence, 12 rate it at Strong Buy, six say Buy and 19 have it at Hold. Furthermore, four call TSLA a Sell and seven say it's a Strong Sell.

This works out to a consensus recommendation of Hold. Meanwhile, the Street's average price target of $222.96 gives Tesla stock implied downside of more than 20% from current levels.

Part of the bear case on Tesla stock has always been its valuation, but that hasn't really worked out so far. The stock always looks expensive. Indeed, TSLA trades at 115 times expected earnings per share. And it has always been volatile. It sports a five-year beta of 2.3 and suffered a maximum all-time drawdown of 73%.

Volatility is a proxy for risk because it increases the odds of buying high and selling low.

And yet, despite these issues, Tesla stock has been a massive market-beater over the longer term. True, TSLA lags the S&P 500 badly over the past one- and three-year periods, but beyond that it has generated outstanding outperformance. Heck, over the past five years, TSLA beats the broader market by about 50 percentage points on an annualized total return basis.

On the other hand, as every prospectus says, past performance is not a guarantee of future returns.

If you were a Tesla bull before Tuesday night, hey, don't let the dream die. But adding exposure to Tesla stock when it's popping on knee-jerk trading action is generally not part of a sound investment process. At least not if you're not a professional.

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Whether your preferred cliche is "talk about buying high" or "better late than never," Nvidia (NVDA) will at long last replace Intel (INTC) in the Dow Jones Industrial Average.

Oh, and by the way, Dow (DOW) is getting the boot too. It will be swapped out of the venerable blue-chip average for Sherwin-Williams (SHW). The NVDA and SHW changes will take place before the market opens on November 8.

As much interest as such events generate, being tapped for the Dow is more symbolic than material. After all, the S&P 500 is the main benchmark for U.S. equity performance. That's why many trillions of dollars are invested in products that track the index.

For example, the largest exchange-traded fund (ETF) in the world, the SPDR S&P 500 ETF Trust (SPY), has more than $590 billion in assets under management alone. A comparable product for the DJIA, the SPDR Dow Jones Industrial Average ETF Trust (DIA), holds less than $39 billion in assets under management.

Also know that, unlike the S&P 500 or the Nasdaq Composite, the Dow is weighted by price rather than by market cap. Although Nvidia has an outsized influence on the movements of the cap-weighted benchmarks, at current prices NVDA stock will be as important to the DJIA as, roughly, 3M (MMM).

There's also the fact that it would have been nice if the keepers of the Dow had made this move sooner rather than later. Once Nvidia split its stock last spring, it became a good fit for the Dow.

Intel, on the other hand, has been dead weight on the Dow for decades.

Indeed, NVDA lapped INTC a long time ago as a credible representative of the semiconductor sector in a concentrated portfolio. (Recall that the Dow comprises just 30 stocks.)

True, NVDA's share price pre-split made it essentially ineligible for Dow membership, but it's impossible not to look back at the charts and wonder what could have been. The bottom line is that the Dow would be higher today had NVDA been a component rather than INTC.

Nvidia for the long run

As we have noted, anyone who put $1,000 into Intel stock 20 years ago has endured a destruction of their capital. Nvidia, on the other hand, has been among the greatest wealth creators of the past several decades. Have a look at what $1,000 invested in Nvidia stock 20 years ago would be worth today. If you wish you had a time machine, you are not alone.

Suffice to say the DJIA's performance would have been better with Nvidia in it. But that wasn't possible. So, is this better late than never?

That's harder to say. Ordinarily, one wants to buy low. Nvidia is up 178% so far this year on a price basis. Heck, shares have gained nearly 30% over the past three months. There's another Wall Street cliche about the easy money already having been made. And it is always true that past performance is not a guarantee of future results.

Either way, the DJIA is certainly more representative of whatever it's supposed to represent with NVDA in it rather than INTC. But apart from having the imprimatur of the editors of the Dow, nothing fundamental has changed.

This fact by itself should be of enormous comfort to Nvidia bulls, of which there are legions on the Street. Of the 62 analysts issuing opinions on NVDA stock surveyed by S&P Global Market Intelligence, 48 rate it at Strong Buy, 10 say Buy and four call it a Hold. That works out to a rare consensus recommendation of Strong Buy. Indeed, Nvidia routinely makes the list of analysts' top S&P 500 stocks to buy.

As to whether you should add to your exposure to Nvidia stock based on its inclusion in the Dow, the answer is no. If you own diversified funds or ETFs tracking, for example, the S&P 500, Nasdaq Composite or Nasdaq-100, you already own Nvidia – and it's probably enough.

As exciting and enviable as Nvidia's position in artificial intelligence (AI) may be, it is ultimately a chip maker. The chip industry is cyclical, and no stock has ever gone up in a straight line.

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Whether you like it or not, members of Congress are allowed to buy and sell stocks. True, federal law prohibits them from using "nonpublic information derived from their official positions for personal benefit," and they're required to disclose their trades.

That said, it's understandable if folks don't quite trust politicians to be on the up and up when their personal fortunes might appear to be in tension with their duties as elected representatives.

Perhaps this is unfair; even cynical. But to modify a famous quote from Upton Sinclair, it's difficult to get a person to understand something when that person's salary depends upon the person not understanding it.

Take, for instance, the uproar around President Donald Trump, who said shortly before announcing a reversal on reciprocal tariffs that it "is a great time to buy stocks."

The reversal sparked a historic stock market rally and has some high-profile Democrats questioning if anyone in the Trump administration profited off the announcement.

Disclosure rules are supposed to help mitigate this problem. Thanks to these requirements, the public can follow what members of the House and Senate are doing with their investments.

Before we go further, please note that this activity shouldn't be used for trading purposes.

After all, insider buying and selling at publicly traded companies is voluminously disclosed and analyzed, but it doesn't really tell us much. That's because insiders – the executives and board members who know what's going on – can sell for any number of legitimate reasons, from paying tuition to portfolio diversification.

When it comes to stocks, insider buying is actually a more useful piece of information. And even then, it's not exactly a screaming buy signal.

Using insider activity among members of Congress as the basis for some kind of trading system is not a rigorous idea.

With those caveats out of the way, it is indeed interesting to see which stocks, bonds and private investments are most popular with members of the House and Senate. Perhaps more interesting is how certain pols churn their portfolios, which is to be avoided if you're a retail investor.

Have a look at the below table to see which politicians were the most active traders by volume over the past 90 days, according to data from Capitol Trades.

Stocks politicians are buying and selling

Look past the municipal debt and investments in limited liability companies, and you can see that pols are pretty normal when it comes to their buys. Top-rated Dow Jones stocks, mega-cap tech names and reliable and rising dividend-payers routinely make the list of our representatives favorite names.

Both sides of the aisle like many of the hottest stocks, including Apple (AAPL), Amazon.com (AMZN), Oracle (ORCL) and Broadcom (AVGO) these days – but then so does pretty much everyone else.

Interestingly, as much as Representative Ro Khanna (D-Calif.) is associated with tech investing, a number of his most recent biggest buys were stalwart blue chips such as JPMorgan Chase (JPM), the nation's biggest bank by assets, and Warren Buffett's Berkshire Hathaway (BRK.B).

Meanwhile, in addition to buying shares in speculative artificial intelligence (AI) firm BigBear.ai Holdings (BBAI), Representative Lisa McClain (R.-Mich.) also picked up Air Products and Chemicals (APD), which happens to be one the best dividend stocks for reliable dividend growth.

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Microsoft (MSFT) knows how to keep long-term investors happy. The tech giant is returning another $60 billion in cash to shareholders through a new stock buyback plan and raised its dividend by more than 10%.

Microsoft's share repurchase program, which has no expiration date, replaces its previous $60 billion authorization announced four years ago. Meanwhile, investors also cheered the news that shareholders of record as of Nov. 21 will receive a quarterly dividend of 83 cents per share, up from the current 75 cents a share.

Microsoft disbursed nearly $22 billion in dividends over the past 12 months and still had levered free cash flow of $56.7 billion. Even better for long-time dividend-growth investors, Microsoft has hiked its payout every year for more than two decades. If it can keep its streak alive, Microsoft will be eligible for inclusion in the S&P 500 Dividend Aristocrats, which are some of the best dividend stocks for reliable and rising payouts.

Please note that although the share repurchase program matches Microsoft's largest-ever authorization, $60 billion represents only about 1.8% of its massive $3.22 trillion market cap.

Shares in Microsoft, the world's second most valuable publicly traded company after Apple (AAPL), were actually lagging the broader market by about 3 percentage points on a price basis for the year-to-date through September 17. 

But as a long-term holding, MSFT stock is hard to beat. Indeed, anyone who put $1,000 into Microsoft 20 years ago would be very pleased with their returns today.

Wall Street loves MSFT stock

Wall Street analysts were already plenty bullish on the Magnificent 7 stock before it announced its plans to return more cash to shareholders. Only three Dow Jones stocks garner Strong Buy consensus recommendations, according to data from S&P Global Market Intelligence. 

Of the 56 analysts issuing opinions on Microsoft stock, 40 call it a Strong Buy, 14 have it at Buy and two rate it at Hold. Only UnitedHealth Group (UNH) gets a higher rating from industry analysts than MSFT.

Meanwhile, with an average target price of $502, the Street gives MSFT stock implied price upside of 16% over the next 12 months or so. 

Analysts' bullishness on Microsoft stems largely from its enviable position in generative artificial intelligence (AI). 

As the "leading generative AI enabling provider," Microsoft offers the most "comprehensive end-to-end AI tooling stack and cutting-edge front-end generative AI applications across its entire portfolio of products," notes the software team at Truist Securities, which rates shares at Buy.

"Microsoft is expected to be a leading benefactor of AI workloads across each layer of the generative AI value chain," says Truist. "From increased data storage and high-performance compute to additive workloads across their PaaS portfolio. Additionally, their Copilot products are expected to add fuel to expansions and upsells across their application portfolio."

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The Federal Reserve is going to cut interest rates at the next Fed meeting, experts say. Only the size and pace of the central bank's easing campaign remain in doubt.

To recap: the worst bout of inflation to hit the U.S. economy since the Carter and Reagan administrations compelled the central bank's rate-setting committee to raise the short-term federal funds rate to a 23-year high. It has been sitting at a target range of 5.25% to 5.5% for more than a year. Inflation peaked more than a year ago but remains sticky, making the rate-setting committee, the Federal Open Market Committee (FOMC), cautious about easing too soon. 

However, the Fed has a dual mandate. In addition to stable prices, it is supposed to support maximum employment. And, alas, the lagged effects of restrictive monetary policy are beginning to show up in the labor market. Fed Chief Jerome Powell has always said the FOMC would be data dependent, and he acknowledged risks to the jobs side of the mandate at the July Fed meeting. Powell doubled down on his dovish turn at Jackson Hole in August.

Unless it's an emergency, the Fed doesn't make changes to policy without telegraphing them well in advance. A rate cut at the next Fed meeting isn't a certainty, but it would be a shock if the FOMC stood pat. 

A rate cut is coming

"History back to 1990 supports the idea that an initial Fed rate cut of 50 basis points signals an imminent recession (2001 and 2007)," write Nicholas Colas and Jessica Rabe, co-founders of DataTrek Research, in a note to clients. "Initial cuts of 25 basis points (1995, 1998, 2019) do not carry that baggage. Powell and the FOMC know this history."

Colas and Rabe expect a quarter-point cut, or 25 basis points (0.25%), at the next Fed meeting. However, a cut of 50 basis points (bps) remains very much in play. 

As of September 16, interest rate traders assigned a 61% probability to 50 bps of cuts, according to CME Group's FedWatch Tool, up from 50% the previous session. Meanwhile, the probability of a quarter-point cut fell to 39% from a coin flip.

It's also important to know that market participants might have a bit of a blind spot as they head into the next Fed meeting. After all, we're set to get a new Summary of Economic Projections (SEP), also known as the dot plot. This collection of forecasts from Fed governors and presidents tends to upset the market's previous assumptions.

The bottom line is that regardless of how much the Fed cuts at its next meeting, the race is already on to predict the trajectory of future reductions to borrowing costs. 

With the Fed set to pivot, we turned to economists, strategists, investment officers and other experts for their thoughts on monetary policy going forward. Please see a selection of their commentary, sometimes edited for brevity or clarity, below.

Fed rate cuts: what the experts say

"We interpret comments from Fed officials just ahead of the blackout period to mean that the FOMC is more likely to cut by 25 bps than 50 bps. We think a 50 bps cut would be a sensible precaution against further labor market softening, but the Fed leadership has communicated a sufficiently dovish reaction function for the bond market to price cuts between 25 bps and 50 bps for several meetings, which also lowers borrowing rates and eases financial conditions today." – Jan Hatzius, chief economist at Goldman Sachs

"The Fed has the green light to cut 25 bps given that the August CPI report was in line with expectations. It's possible that some will be disappointed that there wasn't a lower-than-expected inflation reading, which might have given the Fed more room to cut 50 bps, but most of the Fed speakers have already telegraphed their desire to start slowly and not begin with a jumbo cut. Going forward, the risks are clearly weighted toward slowing growth and a deteriorating labor market, and that's why there are still four 25 bps cuts priced in with only three meetings left in the year (i.e. implying at least one of the three meetings would have a 50 bps), but if the economy continues to slow – and not drop into an abrupt recession – the Fed will be able to cut at a measured, 25 bps-per-meeting pace." – Chris Zaccarelli, chief investment officer at Independent Advisor Alliance

"The Fed probably should cut 50 bps next week … 

As the Fed themselves have said, inflation risks are moving into the rearview mirror, and they do not want to see further labor market weakness. Though strong wage growth suggests the bottom has not yet fallen out of the labor market, jobs creation has declined quickly. In an environment where policy is already restrictive by around 200 bps, moving more quickly towards neutral is a highly reasonable stance, in our view.

... but unless we see a downside surprise on inflation, my base case is that they'll cut 25 bps." – Lauren Goodwin, economist and chief market strategist at New York Life Investments

"Following the payrolls report last week, we updated our Fed call. We now expect the Fed to cut rates by 25 basis points (bps) per meeting starting next week and until March 2025. After these cuts, we think the Fed will be more gradual and resort to one cut per quarter. We still see outsized recession-like cuts as unlikely unless the economy materially deteriorates." – Antonio Gabriel, global economist at BofA Securities

"August's CPI report cemented market expectations that the FOMC will ease by 25 bps at its next meeting. The implied probability of a 25 bps move jumped to 83% from 66% shortly after the August core CPI print. We think investors are now well positioned for September's meeting, but we still see a strong chance of 50 bps cuts in both November and December." – Ian Shepherdson, chairman and chief economist Pantheon Macroeconomics

"Stable producer prices should drive investment and that will drive the economy. It is time for the Fed to cut, but they may well take it slow and steady. That seems to be their operating model. A 25 bps cut in September is the most likely outcome." – Scott Helfstein, head of investment strategy at Global X 

"The Federal Reserve is set to start shifting policy and lower rates at their next meeting. The big question will be whether the Fed cuts by 25 bps or 50 bps, and it'll likely come down to Chair Powell as to whether they go big to get ahead of clearly slowing labor market trends." – Sonu Varghese, global macro strategist at Carson Group

"The Fed is weighing the stickiness of service price inflation on the one hand against the softening of the job market on the other hand. The tradeoff makes them more likely to cut rates by a quarter percent at next week's decision than make a larger half-percent cut." – Bill Adams, chief economist at Comerica Bank

"Inflation trends will give the Fed the opportunity to pivot toward the employment mandate for the rest of this year. Given the stickiness of services inflation, the Fed will likely cut by 25 bps in the upcoming meeting and reserve the potential for more aggressive action later this year if we have further deterioration in the job market." – Jeffrey Roach, chief economist at LPL Financial

"Sticking the landing on rate policy is important to the Fed, but so is controlling the narrative and maintaining the central bank's credibility. With that in mind, there was nothing in the August inflation report that was likely to sway policymakers from the measured quarter-percent cut that they've been guiding expectations toward for some time." – Jim Baird, chief investment officer at Plante Moran Financial Advisors

"We find ourselves at a point where the markets are pricing in an aggressive policy rate cutting cycle, which to us appears to be overdone relative to what the Fed has suggested would be appropriate and relative to the underlying economic conditions at this stage. So, while we're quite certain that the Fed will commence with its rate cuts at its next meeting, there are several significant unknowns that cloud the extent and speed of rate cuts. From election/policy uncertainty for 2025, U.S. debt/Treasury supply dynamics and a particularly impactful period for volatile seasonal factors in economic data, there is a good deal we don't now know about the year ahead." – Rick Rieder, chief investment officer of global fixed income at BlackRock and head of the BlackRock global allocation investment team

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Warren Buffett's Berkshire Hathaway (BRK.B) slashed its stake in Apple (AAPL) by almost half during the second quarter, further rattling a tech sector already under scrutiny over its massive spending on AI – and naturally unnerving some Apple shareholders, too.

After all, Apple stock has been the single largest position in the Berkshire Hathaway equity portfolio for years, typically carrying a weight in excess of 40%. And yet Buffett has been paring Berkshire's enormous Apple stake at an alarming rate in 2024.

He's also taken something off the top of Berkshire's second largest holding, Bank of America (BAC).

Buffett has said his preferred holding period is forever. It's also important to know that Buffett is not, and has never been, a market timer. Furthermore, he has had nothing but praise for Apple – calling it "Berkshire's third business" – and openly admires Bank of America CEO Brian Moynihan. 

So what's going on?

Stay tuned for churn

We won't get the full details of which stocks Warren Buffett bought and sold in the second quarter until Berkshire Hathaway discloses its changes in holdings after the market closes on August 14. 

What we do know now is that this isn't the first time Buffett has taken a big bite out of Berkshire's Apple stake this year. As we wrote at the time, BRK.B cut its position in AAPL by 13% in the first quarter. Keep in mind that Buffett was explicit that this was done for tax purposes: 

"Buffett took pains to explain to Berkshire shareholders at their annual meeting in Omaha on Saturday that the iPhone maker is still, er, the Apple of his eye. (It would have been embarrassing not to, considering Apple CEO Tim Cook attended the event in person.)"

If Buffett has a problem with AAPL, it's that the value of Berkshire's stake has grown tremendously at a time when he expects corporate tax rates to rise, probably sometime in the not-too-distant future. 

As Buffett told the Berkshire faithful: "If I'm looking at a 21% rate this year and then we're [paying] a lot higher percentage later on, I don't think you'll actually mind the fact later on that we sold a little Apple this year."

Buffett pointed out that Berkshire's corporate tax rate was 35% just a few years ago. Back in the late 1960s, it was more than 50%. This man has been around a long time. He knows tax policy is never written in stone.

Perhaps Buffett's calculus explains the thinking behind the BAC sales too. As with Apple, Berkshire has enjoyed outsized returns from its investment in Bank of America. Indeed, Buffett liked the bank so much that Berkshire received special regulatory approval to acquire more than 10% of its shares outstanding. That's commitment.

The bottom line is that whatever Buffett is up, it's actually sort of irrelevant. He is a professional capital allocator. It's his job to maximize the returns on the capital entrusted to him. You either trust Warren Buffett or you don't. If you don't trust him, fine. You're not going to hurt his feelings. His track record sort of speaks for itself.

More selling to come

If today's news bothered you, you might want to skip next Wednesday. That's because Berkshire Hathaway tends to be a net seller of equities when stocks are at record highs. 

The holding company sold $77 billion worth of stock in Q2, mostly Apple. But do not be surprised if we learn that Buffett & Co. trimmed or exited positions in any number of other holdings when Berkshire files its Form 13F with the Securities and Exchange Commission after markets close on August 14. 

Buffett has this funny habit of trying to buy stocks when they are selling at lower prices rather than higher prices. Stocks are pretty pricey these days. Buffett is selling. What's the mystery?

By the way, some folks might try to use Buffett's buys and sells as signals for what to do with their own portfolios. 

That would be silly. 

As noted above, Buffett is not a market timer. This is the man who wrote in The New York Times in October 2008 that he was buying stocks. The market didn't bottom until months later, in March 2009. 

"A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful," Buffett said. 

No, Buffett didn't bottom-tick the S&P 500's 50% collapse. The market fell another 28% from the time he penned that op-ed to equities' nadir. And all Buffett did was buy shares in great companies at cheaper and cheaper prices, probably the entire way down. (Berkshire shareholders then benefited by riding those prices all the way back up.)

As much fun as it might be to see which stocks Warren Buffett is buying and selling, you cannot copy his moves and expect to get the same returns. There are a bunch of reasons for this, but let's keep it simple: Buffett has access to a massive pile of really cheap capital and you don't.

You're no Warren Buffett

Berkshire's timing could have been better. It didn't do market sentiment any favors by releasing its results ahead of a global rout in equities that was mostly sparked by what's happening to the Japanese yen. But that's not on Buffett.

Markets go down as well as up. Pullbacks are normal. "The average drawdown from peak-to-trough in a given year in the U.S. stock market going back to 1928 is -16.3%," notes Ben Carlson, director of institutional asset management at Ritholtz Wealth Management. "Since 1950, the S&P 500 has had an average drawdown of 13.6% over the course of a calendar year."

Volatility is the price of admission to the stock market. The greater the reward, the greater the risk. If you can't handle the equity risk premium, stick to bonds.

In the meantime, leave professional capital allocation to the pros. Word is Warren Buffett is pretty good at it.

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Nvidia (NVDA) has been posting blowout quarterly earnings reports for a year now, but its most recent print came with some ice cream and a cherry on top. Not only did the market's favorite pure-play bet on all things AI hike its dividend, NVDA split its stock.

Although returning more cash to shareholders and making NVDA stock more "accessible" are what Wall Street would call positive catalysts, they are not sufficient reasons in and of themselves to commit fresh capital to any name at any level.

That is not to say that you should not buy more Nvidia stock when it's trading at record highs. Rather, if you want to initiate or add to a position in Nvidia stock these days, the fact that it's effecting a stock split is immaterial.

First let's make clear that stock splits aren't nearly as important for retail investors as they were back in the days before folks could open a smartphone app and buy fractional shares for free. Nvidia is splitting its stock for pretty much the same reason Walmart split its stock, which was more for its own employees.

Secondly, let's stipulate that stock splits are like making change. In this case, shareholders received 10 shares for every one share held. This is essentially the same thing as breaking a $10 bill into 10 one-dollar bills. The fundamentals and technicals don't change – only the arithmetic does. 

Which brings us to Nvidia's dividend hike. The forward yield on NVDA's dividend comes to about 0.03%. The stock's three-year average dividend yield is 0.06%, while the current yield on the S&P 500 stands at 1.36%. Given those facts, it's probably fair to assume that few folks buy Nvidia for the income. 

Nvidia stock is everywhere 

It's also worth mentioning that you probably already have healthy exposure to Nvidia stock.

Nearly 70% of actively managed mutual funds own Nvidia, according to the team at BofA Securities data analytics. And it's not like it's hard to own Nvidia on the passive side, either. As the world's third-most-valuable publicly traded company, Nvidia is in loads of indexes tracked by passive mutual funds and ETFs. 

Take the main benchmark for U.S. equity performance. Thanks to a market cap of nearly $3 trillion, Nvidia's weight in the S&P 500, as represented by the SPDR S&P 500 ETF Trust (SPY), stands at about 6.6%. 

That's actually quite a lot. Think about it like this: if the S&P 500 were, say, an actively managed large-cap balanced fund, the portfolio managers might have to cut their NVDA position by something like half?

Nvidia is also ably represented in the Nasdaq Composite and Nasdaq-100. As for the latter, Nvidia's weight in the growth index – most popularly tracked by the Invesco QQQ Trust (QQQ) – hovers around 8.1%

The bottom line is there's a universe of products offering exposure to the Magnificent 7 stock. No one is complaining about how hard it is to find a good ETF with Nvidia in it.

The Street loves Nvidia for lots of reasons

As we have noted, Nvidia has generated market-crushing returns for a long time. It's trading at record levels because no one knows how big this whole AI thing is going to get. They just know they don't want to miss out.

Will Nvidia keep beating the market? 

Sure, probably, why not? But stocks never go up in a straight line. Markets are cyclical. Chipmakers are highly cyclical. The good news is that Nvidia is trading on some combination of incredible fundamentals and forecasts, and not just hype.

The bad news? Stocks go down, too. There's a bull case and a bear case for everything. Ever notice how share prices fluctuate all session long? Please remember that high-beta stocks such as Nvidia, which have a history of outperforming the broader market when it's going up, also tend to underperform the broader market when it's selling off. 

On a brighter note, Wall Street makes a brawny bull case for Nvidia stock. Analysts, as a group, give NVDA an elite rating of Strong Buy (with high conviction), according to data from S&P Global Market Intelligence.

Instead of trying to summarize these analysts' investment theses in the space provided here, let's just say that of all the really good reasons to be bullish on Nvidia, the stock split isn't very high on the list.

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Apple (AAPL) stock declined in an up market Monday after Berkshire Hathaway (BRK.B) disclosed it cut its stake by 13% in the most recent quarter. 

Is Warren Buffett, Berkshire's chairman and CEO, losing faith in what is by far the company's largest holding?

Not at all.

Buffett took pains to explain to Berkshire shareholders at their annual meeting in Omaha on Saturday that the iPhone maker is still, er, the Apple of his eye. (It would have been embarrassing not to, considering Apple CEO Tim Cook attended the event in person.) 

For the record, the greatest long-term investor of all time said that AAPL is "even better" than American Express (AXP) or Coca-Cola (KO), two "wonderful" businesses that Berkshire has owned since the early 1960s and late 1980s, respectively.

Indeed, during the question and answer portion of the meeting, Buffett was asked: "[Has your] view of the economics of Apple business or its attractiveness as an investment changed since Berkshire first invested in 2016?"

Buffett: "No. But we have sold some shares."

Why? Because corporate taxes are "likely" to go up "later." He figures the federal government – at some unknown future date – will have to raise taxes to reduce the deficit. 

"With current fiscal policies, I think something has to give," said Buffett. "I think that higher taxes are quite likely."

That's not exactly a heretical idea, regardless of your policy preferences or political inclinations. It's also kind of irrelevant. Buffett is a steward of other people's capital. It's his job to maximize their returns. 

"If I'm looking at a 21% rate this year and then we're [paying] a lot higher percentage later on, I don't think you'll actually mind the fact later on that we sold a little Apple this year," Buffett said.

He noted that Berkshire's corporate tax rate was 35% just a few years ago. Back in the late 1960s, it was more than 50%.

Buffett on paying taxes

Mind you, Buffett is no tax dodger. Here are some of the things he said about taxes when explaining the Apple stock sales:

• "Almost everybody I know pays a lot more attention to not paying taxes than I think they should."
• "We don't mind paying taxes at Berkshire."
• "We at Berkshire always hope to pay substantial federal income taxes. We think it's appropriate [to pay taxes] to a country that's been as generous to our owners. It doesn't bother me in the least to write that check. I would really hope that with all that America has done for all of [Berkshire shareholders], it shouldn't bother you that we do it."

The bottom line is that Berkshire doesn't mind paying taxes. But if they're going to go up, better to pay them at a lower rate today than a higher rate tomorrow. 

Apple by the numbers

Apple is still Berkshire Hathaway's largest holding.

At one point last year AAPL accounted for about half of the holding company's U.S. stock portfolio. However, with 790 million shares (down from 905 million at the end of 2023), Apple is now somewhere in the lower-to-mid-40% range.

That's a hefty allocation, but then Berkshire has always maintained a highly concentrated portfolio. Including its positions in Japanese brokerages, Berkshire's top five holdings – AAPL, Bank of America (BAC), AXP, KO and Chevron (CVX) – comprise about 75% of its equity portfolio.

We won't know the exact breakdown of Berkshire's holdings until it files its Form 13F with the Securities and Exchange Commission after the market closes on May 15.

Whatever the filing reveals, Apple bulls needn't fret about Berkshire Hathaway losing its taste for Apple.

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Have you ever noticed that equity investors can't have nice things? As miserable as we are when stocks are going down, we're even more unhappy when they're going up.

There's an empirical explanation for this psychological phenomenon. It's called "loss aversion." Humans are at the mercy of all sorts of cognitive biases, and one of the more perverse ones is that we experience far more pain from losing money than we experience pleasure from winning the same sum.

That's why when markets are rising, stocks are said to be climbing a wall of worry. The higher stocks climb, the more investor anxiety mounts. That's loss aversion at work.

Cut to today, with markets at record highs and valuations stretched by just about any metric you care to use, and it's only natural for investors to question if stocks are in a bubble.

Stocks never go up in a straight line, but that's pretty much what the S&P 500 did after bottoming out early last spring. From its April 7, 2025, intraday low to its close on December 31, the benchmark index was up 41.6% on a price basis. Such a torrid run has U.S. equities trading at some of their very priciest levels in history, according to BofA Securities.

As of December 31, on 18 of 20 metrics the S&P 500 was trading at statistically expensive levels, according to a note to clients from Savita Subramanian, head of U.S. equity strategy and U.S. quantitative strategy at BofA Global Research. Four of the metrics — Market Cap to GDP, Price to Book, Price to Operating Cash Flow and Enterprise Value to Sales were at record highs.

Is the stock market in a bubble? Here's how to tell

Happily, valuation is not a timing tool, as strategists take pains to point out. As Subramanian suggests, opportunities remain for investors willing to look for selective sector opportunities

Meanwhile, though questions remain about when and whether the Federal Reserve will cut interest rates amid a backdrop of broadening and accelerating profits, it's not hard to argue for a boom in earnings-per-share and GDP growth.

It's also possible that stocks have structurally re-rated to carrying richer valuations, as Subramanian noted earlier in 2025.

"The S&P 500 has changed significantly from the 80s, 90s and 2000s," explains Subramanian. "Perhaps we should anchor to today's multiples as the new normal rather than expecting mean reversion to a bygone era."

Perhaps most important, bubbles are as much of a psychological phenomenon as a financial one.

There's no substitute for experience on Wall Street, which is why it's always wise to listen to old hands when it comes to divining the market's machinations. Nicholas Colas, co-founder with Jessica Rabe of DataTrek Research, started working full-time on Wall Street in 1986. He lived through the October 1987 stock market crash and has witnessed every boom and bust up close ever since.

Colas has developed a three-point checklist for "spotting unhealthy, runaway markets." Here's a thumbnail version:

The market for initial public offerings gets frothy. Although the number of IPO announcements hit a multiyear high in the third quarter, the market for new issues has been subdued since it peaked in 2021. Higher interest rates and the availability of private-market funding remain headwinds.

"The good news is that history shows a rampant IPO market is a clear sign of a top," Colas notes. "We're nowhere close to that now."

Hallmark mergers and acquisitions (M&A) deals. "Exceptionally bad deals happen at the top, even if at the time they seem quite sensible," Colas writes. "M&A activity is ultimately a function of CEO/board confidence. Just like retail investors chasing hot IPOs at a market peak, senior managers fall prey to the same overconfidence that the good times will last forever."

Happily, M&A activity, while picking up, also remains under control. Through November 30, M&A volume was up 2% year over year in 2025, according to PwC.

A double is a bubble. Colas has a general rule to identify unsustainably high prices in a range of markets. Whenever the S&P 500 doubles in three years or less, stock prices decline shortly thereafter. The same is true about the Nasdaq Composite over any rolling one-year window going back to the early 1970s, notes Colas.

"A double is a sign of speculative excess because macro conditions are never so different that asset prices should rise 100% over a short period of time," Colas says. "Markets are reasonably good discounting mechanisms. When prices double, you know speculation — not fundamentals — are driving those gains."

Even the Nasdaq Composite, which is the frothiest equity market right now, is up "only" 20% over the past year.

Another tech bubble?

The remarkable bull market in equities was given fresh fuel by the Federal Reserve's jumbo interest rate cut in September 2024, but it's uncertain how much more fuel monetary policy can provide from here. Meanwhile, bubble anxiety centers around the AI companies, such as the Magnificent 7, that dominate the S&P 500 and Nasdaq-100.

Naturally, echoes of the bursting of the dot-com bubble are tat the op of anxious investors' minds.

"The introduction of transformative technologies typically attracts growing investor interest as well as significant capital and new competition," writes Peter Oppenheimer, chief global equity strategist and head of macro research Europe at Goldman Sachs. "As enthusiasm builds and stock prices increase, the sum of individual company valuations can overstate the total potential aggregate returns; often a bubble develops and bursts."

Oppenheimer notes the technology sector has generated 32% of the global equity return and 40% of the U.S. equity market return since 2010. This reflects stronger fundamentals rather than irrational exuberance.

"In our view, the technology sector is not in a bubble and is likely to continue to dominate returns," the strategist adds. That said, "concentration risks are high, and investors should look to diversify exposure to improve risk-adjusted returns while also gaining access to potential winners in smaller technology companies and other parts of the market."

Are stocks in a bubble?

None of Colas' time-proven indicators point to a stock market bubble, but a bubble very much remains a possibility in 2026, Colas says. Keep an eye on IPOs, M&A and how fast market levels rise from here.

Also remember that while the explosive growth in all things AI has valuations looking stretched, Goldman Sachs' Oppenheimer notes, "valuations often also understate the opportunities that can accrue in the nontechnology industries that can leverage the technology to generate higher returns."

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If you're a long-time shareholder in Walmart (WMT) stock wondering why the world's largest retailer effected a three-for-one stock split near the end of February, well, the move wasn't for you. It was for Walmart's employees. 

After all, investors don't need stock splits anymore – not in a world where they can buy fractional shares for free on their smartphones. But Walmart, like a lot of companies, has a program where its employees can buy shares through payroll deductions. The issue? WMT's price was getting a little too rich for the program to work as intended.

After rising almost 18% on a price basis over the past 52 weeks, Walmart stock is trading at record levels. Indeed, at about $174 a pop, WMT stock stands 20% above its three-year average price of $145. Regrettably, the stock's high-flying ways put it out of reach for some.

"[Founder] Sam Walton believed it was important to keep our share price in a range where purchasing whole shares, rather than fractions, was accessible to all of our associates," said Walmart CEO Doug McMillon in a press release.

The solution? A three-for-one stock split ahead of the open on February 26. Recall that as much as the market likes stock splits, they're essentially immaterial. Nothing about a company's fundamentals or outlook changes. A stock split is like making change. I give you two $10s for a $20.

In Walmart's case, shareholders get three shares for every share held – and that could make a big difference to Walmart employees. That's because the company provides a 15% match on the first $1,800 invested each year by eligible associates. 

Walmart's company match works out to $270 – or not even enough to buy two full shares pre-split. After the split, however, that $270 match will buy more than four full shares of this blue chip stock. 

What it means for WMT investors

Not much. As noted above, stock splits get the market excited for maybe a minute, but they are meaningless. The arithmetic changes, but the fundamentals don't. 

For example, Walmart’s outstanding common stock will grow to approximately 8.1 billion from 2.7 billion shares. At the same time, the dividend per share will drop by two-thirds. Walmart, a member of the S&P 500 Dividend Aristocrats, just hiked its payout for a 51st consecutive year. For fiscal 2025, shareholders will receive an annual cash dividend of 83 cents a share on a post-split basis. That's down from $2.49 on a pre-split basis, but shareholders will own three times as many shares. 

If there's anything interesting about WMT's stock split, it's that it will greatly reduce the name's weight in the Dow. Unlike the S&P 500, which is weighted by market capitalization, the Dow is weighted by price. Pre-split, Walmart is the 17th most important Dow Jones stock with a 3% weight in the index. Post-split, WMT will drop to 26th place with a weight of 1%. 

Interestingly, Amazon.com (AMZN) will join the Dow at the beginning of trading next week. It will slot into the place formerly held by Walmart and its roughly 3% weighting in blue chip index.

AMZN has been one of the best stocks of the past 30 years, and anyone who put $1,000 into Amazon stock a couple of decades ago has done even better. Sadly, Walmart has been a market laggard over the last 20 years. 

If past is prologue, more AMZN and less WMT in the Dow will be good for this bluest of blue-chip market benchmarks. 

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The Dow Jones Industrial Average hasn't had a makeover in almost four years, and this time, it's a doozy. Amazon.com (AMZN) will replace Walgreens Boots Alliance (WBA) in the elite 30-component index before markets open on February 26, S&P Dow Jones Indices said in a press release late Tuesday. 

Not that anyone should be too surprised. The keepers of the Dow have long been under pressure to elevate Amazon to the blue-chip barometer. Not only is it the largest e-commerce company in the U.S., but it's also the market leader in cloud services. And then there's Amazon's presence in the analog world, which includes freight & logistics operations and the Whole Foods grocery chain, among other endeavors.

Most important, there's the little fact that Amazon stock has been one for the ages. Anyone who put $1,000 into AMZN stock a couple of decades ago would be delighted with the results today. But that's just what Amazon does over the long term. Between its initial public offering in 1997 and December 2020, Amazon stock created nearly $1.6 trillion in wealth for shareholders, making it one of the 30 best stocks since 1990. 

Why is Amazon replacing Walgreens in the Dow?

Shareholders in Walgreens, on the other hand, probably should have seen this coming. The pharmacy chain slashed its dividend in January by almost half to redirect cash back into the business. WBA stock is also long-time market laggard. Indeed, Wall Street analysts have had a consensus Hold call on shares for years, routinely ranking WBA low on their list of best Dow Jones stocks. 

The final nail in the WBA coffin, however, was its ever-shrinking share price. At around $21, WBA goes for roughly half the next-cheapest Dow stock, Verizon (VZ), at $40. The most expensive Dow Jones stock is UnitedHealth Group (UNH) at $520.

These wide price gaps are a problem because while the S&P 500 is weighted by market capitalization, the Dow is weighted by share price. WBA was begging to be replaced, if only because its low share price made it almost immaterial to the direction of the Dow.

Amazon stock is a much better fit in this regard. At about $169 a share, Amazon's weight in the Dow will land at 17 out of 30, or roughly 2.8%. For comparison's sake, AMZN stock's weighting in the S&P 500 stands at 3.7%.

Although the Dow will start out being underweight Amazon, that's better than having no exposure to one of the most important companies in the U.S. economy. Amazon is also a good fit for the Dow in that although we think of it as a tech name, it's actually part of the consumer discretionary sector. Swapping Amazon in for Walgreens, a consumer staples stock, doesn't technically increase the Dow's weighting in the IT sector.

Neither does the swap much affect the Dow's dividend profile. "Amazon.com joins Boeing (BA) and Salesforce (CRM) as the only non-dividend paying issues in the DJIA (Walgreens paid a dividend)," notes Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. But, at 1.93%, the Dow retains its higher projected dividend yield over the S&P 500 (1.41%), Silverblatt adds. 

The bottom line

Being tapped for the Dow is more about prestige than fund flows. The S&P 500 is the most commonly used benchmark for U.S. stock performance, not the Dow. That's why Amazon stock, with a market value of more than $1.7 trillion, took the news of being tapped for the blue-chip barometer in stride Wednesday. 

But, if nothing else, bringing Amazon into the Dow seems long overdue. As for Walgreens, WBA's tough start to 2024 hasn't been good for anyone following the Dogs of the Dow. Management is trying to turn things around. Analysts say it will be a multi-year process. 

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Shopping for stocks when markets are struggling with a June swoon might not seem like the best idea. Between rising bubble anxiety and mounting uncertainty over the direction of monetary policy, it's understandable if investors are reluctant to put cash to work these days.

On the other hand, markets rarely top out at this time of year. As Ryan Detrick, chief market strategist at Carson Group notes, the most recent all-time high for the S&P 500 was on June 2.

"Stocks soared for the two months off the late March lows, so some weakness in June isn't a big surprise," he writes. "June is the only month in history that hasn't seen the ultimate peak for the year. We don't think this year will be the first one to peak in June."

At the same time, not only has a strong corporate earnings season lifted sentiment, but forward earnings estimates are marching higher. In turn, rising expected operating profits have helped make valuations more attractive.

Besides, every market features select names that are set to outperform.

Although the Magnificent 7 stocks have done much of the bull market's heavy lifting, that hardly means these names are doomed to underperform from here. Indeed, many of them are in pronounced drawdowns. At the same time, a rotation out of these stocks has capital flowing to other, sometimes sleepier, sectors.

As we'll see below, five of Wall Street's top-rated S&P 500 stocks to buy hail from the Magnificent 7. Companies from the financial, healthcare and industrials sectors are ably represented, too.

How we found analysts' top-rated S&P 500 stocks

It's well known that industry analysts are reluctant to slap Sell ratings on the names they cover. There are several reasons for this, some more defensible than others.

What's less commonly understood is that Strong Buy recommendations, while not nearly as rare as Sell calls, are in somewhat short supply, too.

If you run a screen of the S&P 500 using data from S&P Global Market Intelligence, you'll see that analysts assign a consensus Sell recommendation to only one stock.

At the other end of the ratings spectrum stands the Street's highest recommendation of Strong Buy. A total of 52 stocks made the cut there as bullish sentiment soars.

First, a note on our methodology: S&P Global Market Intelligence surveys analysts' stock recommendations and scores them on a five-point scale, in which 1.0 equals Strong Buy and 5.0 means Strong Sell.

Any score below 2.5 means that analysts, on average, rate the stock a Buy. The closer the score gets to 1.0, the stronger the Buy call.

In other words, lower scores are better than higher scores.

Have a look at the chart below to see the 52 stocks in the S&P 500 that score an elite Strong Buy recommendation from industry analysts. Investors who fear it's too late to buy Amazon.com (AMZN), Microsoft (MSFT) or Nvidia (NVDA) will be happy to see they easily made the list.

As much as artificial intelligence (AI) is driving capital spending and market sentiment, analysts see plenty of reasons to be bullish on names across multiple sectors. Here we highlight what Wall Street has to say about three less sexy stocks on the list this month.

GE Aerospace

GE Aerospace (GE), which retained the classic GE ticker following the 2024 spinoff of GE Vernova (GEV), has seen its shares take off as the company establishes itself as a high-margin, pure-play aerospace leader with significant competitive moats.

In a report titled "No sign of stopping the growth engine; reiterate Buy," BofA Securities analyst Ronald Epstein said the company's "robust demand and best-in-class execution support double-digit growth in 2026."

The analyst likes the stock over the longer haul, too, noting that GE Aerospace is well-positioned to benefit from the ongoing ramp-up in commercial aircraft production and sustained aftermarket demand. "Following the spin-off of GE Vernova, we see the company as leaner and focused on execution and safety," Epstein added.

Meanwhile, the company's robust free cash flow – which exceeded $5.7 billion last year – allows GE to aggressively fund R&D and investments in manufacturing infrastructure, all while continuing to return cash to shareholders. GE boosted its dividend by nearly 30% last year. At the same time, it repurchased more than $7 billion in stock.

Shares have delivered only market matching returns so far in 2026 (after adding more than 86% last year), but that just has the stock priced for outperformance, Wall Street says. Of the 22 analysts covering GE, 16 rate it at Strong Buy, three say Buy and two call it a Hold. A lone analyst has a sell recommendation on the name. Nevertheless, that works out to a consensus recommendation of Strong Buy.

Smurfit WestRock

After losing about a quarter of their value in 2025, Smurfit WestRock (SW) shares are beating the broader market by about 4 percentage points this year, and bulls say they are just getting started. After all, the company is still finding its feet.

SW was formed by the 2024 merger of Smurfit Kappa and WestRock Company, creating the world's largest paper packaging company. Smurfit WestRock's operations in 40 countries make it the revenue leader in the world of corrugated cardboard, containerboard, consumer packaging and more.

"We see long-term upside potential and expect earnings growth congruent with growth in e-commerce and growth in demand for sustainable paper and packaging goods," writes Argus Research analyst Alexandra Yates, who rates shares at Buy. "We also expect to see margin growth with operational efficiency improvements in the coming quarters."

Moreover, SW expects $400 million in synergies (also known as cost cuts) as a result of the merger.

With a forward P/E of less than 14, SW trades at 36% discount to the broader market. The dividend yield, at 4.2%, is pretty spicy compared to the S&P 500's yield of less than 1.1%.

Of the 15 analysts covering the materials stock, 10 rate it at Strong Buy and five have it at Buy. That works out to a consensus recommendation of Strong Buy.

Visa

Warren Buffett was a long-time admirer of Visa (V), so it was something of a surprise to see CEO Greg Abel boot it from the Berkshire Hathaway equity portfolio in early 2026.

Happily for continuing shareholders, Wall Street remains bullish on the nation's largest payments processor. Shares are off about 6% over the past year – vs a 26% gain for the broader market – but that just has Visa priced for outperformance amid the relentless war on cash, bulls say.

"Visa remains well positioned to benefit from the ongoing shift to electronic payments and remains one of our top ideas," writes Oppenheimer analyst Rayna Kumar, who rates shares at Outperform (Buy).

The company is enjoying massive growth in value-added services, such as fraud protection, consulting and data analytics. Not only are these high-margin services; they create higher switching costs for banks and merchants. This stickiness helps Visa hold a dominant position in the business-to-business space.

Interestingly, the Street hasn't been this collectively bullish on the name in 16 years. Of the 39 analysts covering Visa, 29 rate it at Strong Buy, seven say Buy and three have it at Hold.

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The S&P 500 Dividend Aristocrats index looks only a little different as we head into the second half of the year. 

Widely regarded as some of the best dividend stocks for dependable dividend growth, the S&P 500 Dividend Aristocrats is an index of S&P 500 companies that have raised their dividends for at least 25 consecutive years.

That's kind of a big deal if you are a long-term equity income investor. Regular dividend hikes not only increase the yield on an investor's original cost basis over time, often quite dramatically; they also help investors sleep better at night.

After all, any company that manages to raise its dividend year after year – through recession, war, market crashes and more – is demonstrating both its financial resilience and its commitment to returning cash to shareholders.

S&P Dow Jones Indices, which rebalances the index quarterly, ditched Walgreens Boots Alliance (WBA) at the beginning of 2024 after the pharmacy chain slashed its dividend by almost half.

Walgreens had increased its dividend every year for nearly half a century before the cut. Analysts, who regularly give WBA one of the lowest rankings of all 30 Dow Jones stocks, applauded the decision to take cash earmarked for shareholders and invest it back into the business. 

Perhaps most interesting is what will happen to long-time member 3M (MMM). The Dow stock is on the Aristocrats chopping block after slashing its dividend as part of its Solventum (SOLV) spin off. 3M is expected to be cut from the list of dependable dividend payers when S&P Dow Jones next rebalances the index.

Dividend Aristocrats Fastenal and Kenvue

The Dividend Aristocrats membership list remains at 67 stocks, however, as Fastenal (FAST) was added to the index in the first quarter of 2024. The industrial supplier has raised its dividend for 25 consecutive years, making it available for inclusion in the index. 

Most recently, Fastenal declared a quarterly cash dividend of 39 cents per share to be paid on February 29 to shareholders of record as of February 1. The company generated more than $1 billion in levered free cash flow in fiscal 2023, and that was after paying out more than a billion dollars in dividends. 

Fastenal stock sports a dividend yield of 2.4%, which is fairly generous for an Aristocrat. The exchange-traded fund that tracks the index, the ProShares S&P 500 Dividend Aristocrats ETF (NOBL), has a dividend yield of 2.1%. 

Other changes to the Dividend Aristocrats over the past year include the removal of VF Corp. (VFC) and the addition of Kenvue (KVUE), which was spun off from fellow Aristocrat Johnson & Johnson (JNJ). 

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No one likes the akshually guy, but the bull market isn't really two years old. Although the S&P 500 notched its bear-market bottom on October 12, 2022, a bull market doesn't begin until the market regains its previous peak. By that definition, our current bull market was confirmed in January. Until that point, it was still underwater.

With that technicality of technical analysis out of the way, let's just agree that – what the heck – the bull market is two years old. After all, a bull market isn't defined by a chart; it's made by people. When the macroeconomic backdrop appears favorable for corporate earnings, when those earnings are forecast to grow at an attractive or accelerating rate, and when market participants are willing to pay higher and higher premiums for those expected earnings? Yeah, that's a bull market.

The S&P 500 generated a total return (price change plus dividends) of 67% from the bear-market bottom through late October, driven mostly by the Magnificent 7 stocks. And while it's true Nvidia (NVDA), Apple (AAPL), Microsoft (MSFT) and other mega-cap AI plays generated an outsized role in the bull market's gains, that cliché about a rising tide lifting all boats is mostly true when it comes to equities.

Best stocks: buy, sell or hold?

To that end, we screened the S&P 500 for the stocks with the highest total returns since the bear-market bottom to see how industry analysts viewed them at current levels. After all, the names below have more than doubled or even quadrupled and then some. Valuations tend to get stretched after such hot runs, leading to lower future returns.

Below please find the S&P 500 stocks generating the highest total returns from the bear-market bottom through October 23. We also delved into what industry analysts think of these stocks' prospects going forward, using data from S&P Global Market Intelligence. You can see Wall Street's consensus recommendations and scores in the table below.

A note on the scoring system: S&P Global Market Intelligence surveys analysts' stock recommendations and scores them on a five-point scale, where 1.0 equals Strong Buy and 5.0 means Strong Sell. Any score of 2.5 or lower means that analysts, on average, rate the stock a Buy. The closer the score gets to 1.0, the stronger the Buy call.

In other words, lower scores are better than higher scores.

Below please find the best S&P 500 stocks of the bull market and how the Street rates them now.

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It's easy to forget about the importance of dividends when the market is notching new all-time highs. And while no old saw is a substitute for a comprehensive wealth management plan, there really is something to the cliche about high-quality dividend stocks never going out of style.

Dividends really do matter. Although such regular payouts to shareholders have become much less popular over the decades, dividends still account for a critical share of the market's total return (price change plus dividends). 

Since 1960, 69% of the total return of the S&P 500 can be attributed to reinvested dividends and compounding, according to a study by Hartford Funds. And while companies may not pay dividends like they used to, dividends have still fueled nearly a quarter of the S&P 500's annualized total returns so far this decade.

Interestingly, the case for dividends actually gets more compelling when the market is making new highs and valuations are getting stretched.

"Dividends have historically played a significant role in total return," the Hartford Funds report notes, "particularly when average annual equity returns were lower than 10% during a decade."

Sadly, average annual equity returns are indeed looking to be pretty poor over the next 10 years, at least by one highly regarded measure. The S&P 500 Shiller cyclically adjusted price/earnings ratio (CAPE) has a solid track record of forecasting long-term annualized returns. At its current level, Shiller CAPE gives the broader market an implied annualized total return of 3.9% over the next 10 years.

That's pretty crummy considering the S&P 500 delivered an annualized total return of more than 12% over the past decade. It also suggests that dividend stocks as an asset class could be very helpful to buy and hold these days.

Wall Street's top S&P 500 dividend stocks

In order to find Wall Street's top dividend stocks to buy now, we used S&P Global Market Intelligence to screen the S&P 500 index for analysts' highest rated names yielding at least 3% as of January 19. 

A note on the ratings system: S&P Global Market Intelligence surveys analysts' stock recommendations and scores them on a five-point scale, where 1.0 equals Strong Buy and 5.0 means Strong Sell. Any score of 2.5 or lower means that analysts, on average, rate the stock a Buy. The closer the score gets to 1.0, the stronger the Buy call. In other words, lower scores are better than higher scores.

We used a 3% yield as our lower bound because that's essentially twice the S&P 500's yield of 1.49%.

If you're looking to add Buy-rated dividend stocks to your portfolio, the names listed below are the best the S&P 500 has to offer, according to industry analysts. 

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• World's Most Valuable Company: Apple and Microsoft Battle for Top Spot
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Apple (AAPL) and Microsoft (MSFT) find themselves in a tight race over bragging rights to the title of world's most valuable publicly traded company after AAPL stock popped following a big analyst upgrade.

A poor start to the year already had some bulls saying it's time to buy the dip in Apple stock. But when one of Wall Street's largest broker-dealers joined the chorus before Thursday's opening bell, it helped Apple recover billions in market value.

BofA Securities lifted its recommendation on AAPL stock to Buy from Neutral (the equivalent of Hold), citing the iPhone maker's investments in generative artificial intelligence (AI) and the launch of its Vision Pro mixed reality headset, among other impending catalysts. 

With a new price target of $225 – up from $208 – BofA Securities gives AAPL stock implied upside of about 20% over the next 12 months or so. The Street's average target price stands at $199.40, according to data from S&P Global Market Intelligence, good for implied upside of only 6% in the next year. 

Importantly, while some analysts have cited weaker iPhone sales in China as reasons to become more cautious on AAPL stock, the BofA Securities team led by analyst Wamsi Mohan argued as part of its upgrade that Apple's "China weakness is largely offset by strength in other countries."

Although Apple routinely makes the list of Wall Street's top-ranked Dow Jones stocks, worries over demand in China have AAPL off to a rough start in 2024. Apple stock is up about 38% over the past 52 weeks, but shares have spent all of January in the red on a year-to-date basis, hurt partly by downgrades.

Piper Sandler analyst Harsh Kumar cut his recommendation on the stock in early January to Neutral (the equivalent of Hold) from Overweight (Buy), citing a weak macroeconomic backdrop in China. Kumar's downgrade followed a more bearish downgrade by Barclays analyst Tim Long – to Underweight from Neutral – two days earlier. Long also cited weaker revenue in China as a concern.

Apple has seen iPhone sales soften in China amid an economic slowdown and other factors. Consumers are holding onto their pricey iPhones longer between refresh cycles, analysts note, while a new 5G phone from rival Huawei is also chipping away at iPhone demand. 

Microsoft and Apple run neck and neck

While Apple stock has traded essentially sideways for six months on worries that growth has peaked, fellow Magnificent 7 stock Microsoft overtook it as the global leader in market capitalization thanks to exuberance over generative AI. 

Microsoft, which enjoys a sort of first-mover advantage in AI via its partnership with OpenAI, had already been an outstanding long-term holding thanks to its dominance in cloud services. 

Not only was MSFT one of the 30 best stocks in the world for three decades, anyone who put $1,000 into Microsoft stock 20 years ago would have clobbered  the broader market. 

Check out the stocks billionaires are buying or hedge funds' top blue chip stocks and you'll see that much of the putative smart money agrees with the Street's view, which gives MSFT a rare consensus recommendation of Strong Buy. 

"Microsoft continues to pursue long-term growth through its AI and cloud investments, and may just hold the premier position in business technology," writes Argus Research analyst Joseph Bonner, who rates shares at Buy. "It also has a large and loyal customer base, a large cash cushion and a rock-solid balance sheet."

Have a look at the above chart and you'll see how bullishness like Bonner's helped Microsoft stock return nearly 65% over the past 52 weeks, allowing it to surpass Apple in market capitalization. 

As of Thursday's close, the two tech giants were separated by less than $10 billion in market cap: $2.927 trillion for MSFT vs $2.917 trillion for AAPL, or essentially tied.

Whether the companies' market values diverge from here is the big question. Happily for investors in both names, the Street very much expects AAPL stock and MSFT stock to continue to beat the broader market in the year ahead.

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A couple of analyst downgrades might have Apple (AAPL) stock reeling to start the new year, but much of Wall Street sees the AAPL selloff as a chance to pick up shares in the iPhone maker on the cheap.

Apple is routinely one of Wall Street's top-ranked Dow Jones stocks, but concerns over demand in China have some analysts becoming increasingly cautious on the name. Piper Sandler analyst Harsh Kumar cut his recommendation on the stock last week to Neutral (the equivalent of Hold) from Overweight (Buy), citing a weak macroeconomic backdrop in China. 

"We are concerned about handset inventories," Kumar wrote in a note to clients. "Growth rates have peaked for unit sales." 

Piper Sandler's downgrade followed a more bearish downgrade by Barclays analyst Tim Long – to Underweight from Neutral – two days earlier. Long also cited weaker revenue in China as a concern.

Apple has seen iPhone sales soften in China amid an economic slowdown and other factors. Consumers are holding onto their pricey iPhones longer between refresh cycles, analysts note, while a new 5G phone from rival Huawei is also chipping away at iPhone demand. 

The bottom line is that although AAPL stock is still up more than 40% on a price basis over the past 52 weeks, it's down more than 4% to start the year. The world's most valuable publicly traded company has lost more than $135 billion in market capitalization in 2024 alone – or roughly the entire market value of General Electric (GE). Pull the chart back to AAPL stock's peak in mid-December, and the company has lost an astonishing $225 billion in market cap since then. 

The Street says buy Apple stock

Morgan Stanley analyst Erik Woodring speaks for the bulls when he notes that Wall Street sentiment towards Apple – as approximated through its mix of Buy, Hold and Sell ratings – is at its lowest point since September 2020. That's a contrarian buy signal, in the analysts' view, and he advises clients to buy Apple stock on weakness. 

Woodring contends Apple's fundamentals are on the path to recovery, albeit with some near-term unevenness. More importantly, 2024 will be the year when Apple's artificial intelligence (AI) efforts likely come to fruition, the analyst adds. 

If you look at the Street's recommendations, it has indeed become the most uncertain about Apple stock since 2020. That said, it does remain collectively bullish on the name. Of the 45 analysts covering AAPL surveyed by S&P Global Market Intelligence, 20 rate it at Strong Buy, seven say Buy, 14 have it at Hold, three say it's a Sell and one calls it a Strong Sell. That works out to a consensus recommendation of Buy, with mixed conviction.

Meanwhile, analysts' average target price of $198.81 gives Apple stock implied price upside of more than 8% in the next 12 months. Wall Street strategists give the S&P 500 average implied upside of about 5% in the year ahead. 

As for buy-and-hold Apple investors, well, they can pretty much ignore its latest gyrations in share price. After all, Apple has been a dream of a long-term holding. It was the best stock in the world for the 30 years ended 2020. And anyone who put $1,000 into Apple stock two decades ago would be very happy with the results today too. 

That's partly why billionaire investors are big fans of Apple stock. Apple is hard to top when it comes to hedge funds' top blue chip stocks, as well. And, of course, there is no bigger fan of Apple – or of buying on weakness – than Warren Buffett.

The iPhone maker accounts for about half of Berkshire Hathaway's (BRK.B) equity portfolio, but AAPL's red-hot run – along with the rest of the Magnificent 7 stocks – means Buffett hasn't added to it in some time.

Don't be surprised to learn from regulatory filings a few months from now that the smart money was buying Apple stock in bunches during this January swoon. 

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• Walgreens Slashes Dividend by Almost Half

Walgreens Boots Alliance (WBA) stock tumbled Thursday after the pharmacy chain slashed its dividend by almost half. The move puts the company at risk of being removed from the S&P 500 Dividend Aristocrats, an index of S&P 500 companies that have raised their dividends for at least 25 consecutive years. 

At its old dividend level, Walgreens was one of the stocks with the highest dividend yields in the S&P 500. But that's about to change.

The company announced a quarterly dividend of 25 cents a share on Thursday, down from the prior quarter's payout of 48 cents a share. The dividend is payable on March 12 to stockholders of record as of February 20, Walgreens said in a news release. 

"This action reinforces our goal of increasing cash flow, while freeing up capital to invest in sustainable growth initiatives in our pharmacy and healthcare businesses, which we believe will ultimately improve shareholder value," Walgreen CEO Tim Wentworth said in a statement. 

At 48 cents per share per quarter, the forward yield on WBA stock comes to more than 7.5%. However, at the new rate of 25 cents per share per quarter, the forward yield on WBA stock falls to about 4.1%. That's still generous, but well below WBA's own three-year average dividend yield of 5.1%.

Analysts, who already give WBA one of the lowest rankings of all 30 Dow Jones stocks, applauded the decision to take cash earmarked for shareholders and invest it back into the business. 

CFRA Research analyst Arun Sundaram, for one, reiterated his Hold recommendation on WBA, noting the company is "on pace toward $1 billion of cost savings this fiscal year, in addition to about $600 million of lower capital expenditures and $500 million in working capital benefits."

Industry analysts have assigned WBA stock a consensus recommendation of Hold for more than five years, according to data from S&P Global Market Intelligence. Of the 18 analysts covering WBA today, two rate it at Strong Buy, one says Buy, 12 have it at Hold, two say Sell and one ranks it at Strong Sell. 

With an average target price of $26.67, Wall Street gives WBA stock implied price upside of about 12% in the next 12 months or so. Add in the dividend yield, and WBA's implied total return comes to about 16% in the next year or so. 

Walgreens earnings beat estimates

Walgreens also on Thursday posted better-than-expected fiscal first-quarter earnings. On an adjusted basis, which is what industry analysts care about, Walgreens earned 66 cents a share, easily topping Wall Street's average forecast of 62 cents a share. Sales of $36.7 billion also beat analysts' estimate. 

"WBA delivered fiscal first quarter results in line with overall expectations, reflecting disciplined execution in a challenging consumer backdrop," said CEO Wentworth in Walgreens' earnings release. "We are evaluating all strategic options to drive sustainable long-term shareholder value, focusing on swift actions to right-size costs and increase cash flow, with a balanced approach to capital allocation priorities."

WBA stock is a long-time market laggard. Over the past 20 years, shares generated a total return (price change plus dividends) of less than 1%. That lags the S&P 500's total return over the same period by about 10 percentage points. 

And the performance only gets worse from there. WBA stock delivered negative total returns over the past one-, three-, five- and 10-year periods. As wonderful as Walgreens' annual dividend increases have been, they have been more than offset by relentless share-price depreciation. 

Walgreens Boots Alliance stock is one of the top-weighted names in the Dividend Aristocrats and – by extension – the ProShares S&P 500 Dividend Aristocrats ETF (NOBL) that tracks the Aristocrats. Needless to say, WBA stock hasn't been doing investors in NOBL any favors. 

WBA may lose its status as a Dividend Aristocrat, but if these new capital plans can kick start its moribund stock price, long-suffering equity income investors will almost certainly come to forgive it. 

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Wall Street's top strategists collectively forecast another year of gains for the S&P 500, albeit a much more muted one. That's to be expected after the benchmark index gained more than fifth on a price basis in 2023.

Wall Street's average target on the index gives the S&P 500 implied upside of about 5% from current levels. At the high end, Capital Economics forecasts the benchmark index to hit 5,500 by the end of 2024, giving the S&P 500 implied price upside of about 15% next year. At the low end, JPMorgan Chase expects the index to retreat 12% to 4,200 in 2024. 

Passive investors will go along for the ride no matter where it takes them. Stock pickers, on the other hand, seek to beat their benchmarks, and that's where Wall Street's S&P 500 stocks with the most upside come in. 

Analysts base their Buy, Hold or Sell recommendations on how they expect a stock to perform relative to the S&P 500 over the next 12 months or so. To do so, they plug numbers into discounted cash flow models. These models spit out price targets, which tell them where the stock should be trading in a year. The difference between the stock's current price and its target is called its implied, or potential, upside. Analysts' average price targets tell you how the Street collectively expects a stock to perform.

While you can hardly base a stock-picking strategy on the sole criterion of price targets, it can be helpful to know which S&P 500 stocks are expected to deliver the biggest returns in the year ahead. To that end, we used S&P Global Market Intelligence to screen the S&P 500 for the index members with the highest implied upside for 2024 and beyond. 

Have a look at the table below to see the 10 S&P 500 stocks analysts expect to put up the biggest price gains in 2024. (Price targets and other data are as of December 22.)

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The Dogs of the Dow is an investing strategy where income investors essentially bet on beaten-down blue chip dividend stocks in the Dow Jones Industrial Average. 

First popularized in the early 1990s, the Dogs of the Dow is supposed to deliver superior risk-adjusted returns vs the DJIA. Although the Dogs of the Dow has a mixed track record in that regard, at least it's dead simple to follow: buy the 10 Dow stocks with the highest dividend yields in the average at the end of December, and then hold them for one year.

The idea behind the Dogs of the Dow is that investors are using the highest dividend yields as proxies for valuation. Recall that a dividend stock's yield rises as its price falls. The Dow Jones stocks with the highest dividend yields should theoretically be bargains, what with their depressed share prices and all. 

With the end of the year approaching, it's time for followers of the Dogs of the Dow strategy to rebalance their portfolios. Below please find the 10 Dogs of the Dow for 2024, listed by dividend yield as of December 22. 

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The earnings recession that started a year ago looks to be over.

With more than 98% of S&P 500 companies having reported quarterly results, it's fair to say the numbers are in and they're good. The S&P 500 is set to post year-over-year earnings growth for the first time since the third quarter of 2022.

Indeed, the S&P 500's Q3 earnings growth state stands at 4.8%, according to FactSet. That's remarkable considering that as of September 30, analysts forecast the S&P 500 to post a 0.3% decline in year-over-year third-quarter earnings. 

And make no mistake: this was a better-than-expected earnings season that delivered on a number of fronts.

Drilling down, 82% of S&P 500 companies exceeded analysts' average earnings per share (EPS) estimate vs a five-year average of 77% and a 10-year average of 74%. Looked at another way, the S&P 500's EPS beat rate hasn't been this high in two years. 

Moreover, companies beat Wall Street EPS estimates by an average of 7.2%. Although that's below the five-year average of 8.5%, it easily tops the 10-year mean of 6.6%.

"Positive earnings surprises reported by companies in the information technology, financials and consumer discretionary sectors, partially offset by downward revisions to EPS estimates and negative earnings surprises reported by companies in the healthcare sector, have been the largest contributors to the increase in the earnings for the index," writes John Butters, senior earnings analyst at FactSet. 

The consumer discretionary sector more than pulled its upside-surprise weight during Q3 earnings season, with Airbnb (ABNB), Amazon.com (AMZN) and Nike (NKE), a highly rated Dow Jones stock, delivering some of the biggest EPS beats.

In the tech sector, Nvidia (NVDA) – NVDA stock has tripled this year – Intel (INTC) and Intuit (INTU) all exceeded Street EPS forecasts by wide margins. The communications services sector was boosted by better-than-expected earnings from Meta Platforms (META) and Paramount Global (PARA), among other names.

Street slashing Q4 earnings estimates

The Street was too downbeat coming into Q3 and it's not much more optimistic about Q4. Concerns about a possible economic slowdown or recession have analysts lowering their Q4 EPS estimates by more than usual, per FactSet.

"During the months of October and November, analysts lowered EPS estimates for the fourth quarter by a larger margin than average," Butters notes. "The Q4 bottom-up EPS estimate decreased by 5% from September 30 to November 30."

For context, the average decline in the bottom-up EPS estimate during the first two months of a quarter is 2.9% over the past five years, and 2.7% over the past decade.

It's important to note analysts are taking cues from the companies they follow – and there's increasing pessimism to be found in the C-suite, too. The percentage of companies issuing negative earnings guidance for the fourth quarter stands comfortably above both its five- and 10-year averages. 

Of course, there's nothing wrong with talking down expectations. The more the Street lowers its expectations, the easier it is for companies to beat them.

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Walt Disney (DIS) reinstated its dividend after a three-year suspension, a move that's good news for income investors and could help bolster the media and entertainment giant's beleaguered share price.

Disney's board on Thursday declared a cash dividend of 30 cents per share, payable on January 10 to shareholders of record at the close of business on December 11, 2023. 

"This has been a year of important progress for The Walt Disney Company, defined by a strategic restructuring and a renewed focus on long-term growth," said Disney Chairman Mark Parker in a news release. "As Disney moves forward with its key strategic objectives, we are pleased to declare a dividend for our shareholders while we continue to invest in the company's future and prioritize meaningful value creation."

Disney suspended its dividend in the spring of 2020 in order to conserve cash amid the COVID-19 pandemic. 

Also on Thursday, Disney said that Morgan Stanley (MS) CEO James Gorman and former Sky TV chief Jeremy Darroch will join its board early next year. The move comes as Disney faces a proxy fight with activist investor Nelson Peltz, who is reportedly seeking at least two board seats. 

Better times ahead for DIS stock?

Disney shareholders can be forgiven if they wish the company were celebrating its 100th anniversary against a happier backdrop. Like the rest of the industry, Disney is grappling with slower advertising spending, the decline of linear TV and steep losses in its streaming business. 

Shares in DIS now lag the broader market on an annualized total return basis over pretty much every standardized period you care to measure. That's a big come down for a name that was once one of the 30 best stocks of the past 30 years. 

Indeed, if you'd put $1,000 into Disney stock 20 years ago, you would be very disappointed with the results today. 

As painful a period as this has been for long-term DIS shareholders, Wall Street thinks better times are ahead. Disney is one of analysts' top Dow Jones stocks, for one thing. Of the 32 analysts issuing opinions on Disney stock surveyed by S&P Global Market Intelligence, 19 rate it at Strong Buy, five call it a Buy, six have it at Hold and two rate it at Strong Sell. That works out to a consensus recommendation of Buy, with high conviction. 

Meanwhile, with an average target price of $103.71, the Street gives DIS stock implied price upside of about 13% over the next year or so. 

"Disney remains Netflix's (NFLX) one true competitor in long-form video streaming, and is taking giant steps toward profitability in its direct-to-consumer businesses," says Argus Research analyst Joseph Bonner, who rates DIS at Buy. "With the return of Bob Iger as CEO, Disney is working to lower investment in its direct-to-consumer business and to focus on the most profitable content."

The market's so-called smart money increasingly likes Disney stock too. Although it may have fallen off the list of hedge funds' favorite blue chip stocks in the third quarter, hedge funds still increased their net ownership of Disney stock by more than 12%, or 23 million shares, during the period.

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When it comes to blue chip stocks that pay dividends and play defense, Walmart's (WMT) reputation is pretty tough to beat.

Indeed, Walmart is indisputably one of the best dividend stocks for dependable dividend growth.

This member of the S&P 500 Dividend Aristocrats has increased its payout annually for more than half a century. For those reasons and more, Walmart ranks as one of analysts' favorite Dow Jones stocks.

Walmart's defensive characteristics certainly came in handy in 2022, as you can see in the chart below. The S&P 500 generated a total return (price change plus dividends) of -18.1%, a historically bad result.

On the other hand, Walmart's total return came to -0.5% – or essentially flat – to beat the broader market by more than 17 percentage points.

The other side of WMT's defensive coin can be seen in its performance during 2023's remarkable rally. While the S&P 500 returned more than 26%, Walmart returned less than 13%.

As for 2026, WMT's defensive characteristics once again proving their worth. Shares have returned 16% so far this year, while the S&P 500 is basically flat. This recent outperformance has helped WMT turn in solid market-beating returns on a 20-year basis.

That's a change in fortune. WMT stock was a long-time laggard following a torrid run in the 1990s, hurt by the market's preference for growth over value, as well as worries about the future of bricks-and-mortar retail.

The bottom line on Walmart stock

Walmart stock was actually one of the best stocks of the 30 years between 1990 and 2020, but as you can see in the chart below, WMT basically traded sideways for the first decade-plus of the 21st century.

Walmart shares went nowhere for a long time, but then that's not necessarily unusual given how far and fast they appreciated during the bubblicious 90s.

Between the beginning of 1997 and the end of 1999, WMT gained more than 500% on a price basis. The broader market didn't quite double over the same span.

Also weighing on WMT during the first decade of the new century was the threat from e-commerce.

Walmart responded by becoming the second-largest e-commerce retailer in the U.S. after Amazon.com (AMZN) – albeit a distant second. Walmart got serious about its digital strategy sometime around 2006, but it took a while for what was regarded as "show-me" story to ultimately prove successful.

Whatever the causes, that lost decade on Walmart's stock chart hurts its long-term results. Over the past 20 years, WMT stock has generated an annualized total return of 13.5% vs 10.8% for the S&P 500.

To get a sense of what this sort of ride looks like on a stock chart over the past two decades, see the chart below.

The chart illustrates the fact that if you invested $1,000 in Walmart stock 20 years ago, today it would be worth about $12,600. The same thousand bucks invested in an S&P 500 ETF would be worth about $7,700 today.

As for its entire history as a publicly traded company, WMT's annualized total return beats the broader market by about 3 percentage points.

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U.S. dividend growth continued its "steady deceleration" during the April through June period to mark a sixth consecutive quarter of slower dividend increases, according to a study by the Janus Henderson Global Dividend Index.

Although the latest data might sound somewhat alarming, note that difficult comparisons against prior-year periods of unusually robust growth are partly to blame for the deceleration in dividend increases. While many of their global counterparts were enacting steep dividend cuts during the pandemic, U.S. companies managed to grow their payouts with "exceptional resilience," writes Ben Lofthouse, head of global equity income at Janus Henderson Investors.

On a headline basis, second-quarter U.S. dividend growth rose 2.6% year-over-year to $148 billion. Excluding lower one-off special dividends, the underlying growth rate came to 4.6% in Q2. While investors certainly would have preferred to see stronger year-over-year dividend growth, the figures still represent a "creditable increase," Janus Henderson reports.

"Notably, 98% of U.S. companies in our index either raised payouts or held them steady, well above the global average," Lofthouse says.

On a global basis, dividends rose 4.9% to a record $568.1 billion in Q2, per Janus Henderson. Underlying growth, which adjusts for lower one-off special dividends and other minor factors, came to 6.3%.

Healthcare leads U.S. dividend growth

Looking at the U.S., companies in the healthcare sector were the biggest contributors to second-quarter dividend growth, led by Eli Lilly (LLY) and UnitedHealth Group (UNH). UNH happens to be Wall Street's top-rated name among all 30 Dow Jones stocks. 

U.S. real estate companies also helped boost domestic dividend growth, with logistics property specialist Prologis (PLD) being the sector standout. Real estate investment trusts, or REITs, are especially valued by equity income investors for their typically generous disbursements.

Pulling in the other direction on U.S. dividend growth were Intel (INTC) and Blackstone (BX), both of which cut their dividends in bids to preserve or redirect cash. Intel, a member of the Dow, may have returned to profitability in Q2, but this blue chip stock has been a poor investment over the past 20 years. 

Although economic growth around the world is moderating amid higher interest rates, Janus Henderson expects dividend growth to continue in 2023. 

"One of the reassuring features of dividend income is that it is typically much less volatile than earnings," Lofthouse adds. "Payouts lagged behind profit growth last year and so can therefore exceed it this year."

For all of 2023, Janus Henderson forecasts global dividends to increase 5.2% on a headline basis to $1.64 billion. Underlying growth is expected to hit 5.0% vs 2022. 

While accelerating dividend increases would be the preferable state of affairs, the data remain indisputably good news for buy-and-hold dividend growth investors. Shares in companies that raise their payouts like clockwork decade after decade can produce superior total returns (price change plus dividends) over the long run, even if they sport apparently ho-hum yields to begin with. 

Fears of an economic slowdown or outright recession are likely to keep a lid on the rate of dividend growth for the foreseeable future. Be that as it may, loads of stocks can be counted on to hike their dividends regardless of economic conditions. Investors looking to add such names to their portfolios will find plenty of candidates among the best dividend stocks for dependable dividend growth. 

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Shares of AT&T (T) and Verizon Communications (VZ) sport two of the highest dividend yields in the S&P 500, and that's making some equity income investors increasingly nervous. 

The reason being that the dividend yields on these telecommunications stocks are unusually elevated because their share prices are in the dumps.

Recall that stock prices and dividend yields move in opposite directions. It's possible that a too-good-to-be-true dividend yield is simply a side effect of a stock having lost a lot of value. And anytime a company's stock is slumping badly, it's worth wondering if its dividend is sustainable at current levels.

AT&T and Verizon, the latter being one of the Dow Jones stocks, are historically dividend stalwarts. But with their share prices under duress, worries about dividend cuts are to be expected.

Both companies are contending with concerns about increased competition in wireless and slower industry growth, but the issue most punishing their shares these days are concerns over costs related to lead contamination cleanup. 

An investigation by The Wall Street Journal published in July found that "AT&T, Verizon and other telecom giants have left behind a sprawling network of cables covered in toxic lead that stretches across the U.S."

Costs associated with any cleanup could have ramifications for AT&T and VZ's free cash flow (FCF), or the cash remaining after expenses, capital expenditures and financial commitments have been met. Dividends are ultimately supported by free cash flow.

AT&T, VZ dividends look safe

AT&T stock has lost about a fifth of its value for the year-to-date, pushing up the yield on its dividend to 7.8%. As for VZ, shares are off about 12% for the year-to-date, also lifting its dividend yield to around 7.8%.

In what should come as a relief to investors, analysts say the selloffs on lead contamination fears are overdone. Perhaps more importantly, the dividends look safe.

Citi analyst Michael Rollins this week raised his recommendations on both AT&T and Verizon to Buy from Neutral (the equivalent of Hold). He also maintained his "High Risk" rating on both stocks. Rollins argues that T and VZ could become turnaround stories if the costs associated with lead cleanup are lower than expected. 

"Market capitalizations for the telcos with possible [lead contamination] exposure are down $21 billion vs an estimated $15 billion cost of remediation based on latest disclosures and our estimates," Rollins wrote in a note to clients. 

Rollins' calculations suggest the costs of cleanup have been more than adequately discounted in the sectors' valuation. AT&T and VZ could also get a boost if the competitive environment stabilizes, the analyst adds.

At AT&T, shareholders can take additional comfort in the fact that the company has been chipping away at its heavy debt load and freeing up cash. AT&T generated positive free cash flow of $103.4 billion in 2022. That compares favorably against negative free cash flow of $67.7 billion the previous year. 

Over at Verizon, the company generated free cash flow of $11.5 billion for the 12 months ended June 30, 2023. That was after disbursing $10.9 billion in dividends.

Buy, sell or hold?

For the record, analysts as a group aren't quite as bullish as Citi's Rollins. 

Of the 29 analysts covering AT&T tracked by S&P Global Market Intelligence, 10 call it a Strong Buy, two have it at Buy, 15 say it's a Hold and two rate it at Strong Sell. That works out to a consensus recommendation of Buy, with tepid conviction. 

As for VZ stock's prospects for beating the market over the next 12 to 18 months, Wall Street is split. Analysts' consensus recommendation stands at Hold.

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Notwithstanding some recent weakness following a downgrade of the United State's credit rating, stocks are off to their best start in more than a quarter of a century. The question now is whether the remarkable rally of 2023 can continue to run through year-end and beyond.

It's a perfectly reasonable question to ask. Thanks to the cognitive bias of loss aversion, bull markets always climb the proverbial wall of worry. Besides, everyone knows that stocks never go up in a straight line. 

It's also true that valuations are indeed getting a bit stretched. To take just one example, consider the S&P 500 Shiller cyclically adjusted price/earnings ratio (CAPE). It has a solid track record of forecasting long-term annualized returns. At its current level, Shiller CAPE gives the broader market an implied annualized total return of 4% over the next 10 years. That's pretty crummy considering the S&P 500 delivered an annualized total return (price change plus dividends) of more than 12% over the past decade. 

Then there's the little matter of a possible economic downturn. As much as recession fears have receded – the staff of the Federal Reserve, for example, no longer expects one – sundry surveys and models still put the odds of a downturn hitting in the next year at uncomfortably high levels. Kiplinger's GDP outlook assigns a 40% probability to a recession happening over the next 12 months. More worrisome is the Federal Reserve Bank of New York's yield-curve model, which spits out a 67% chance of recession occurring in the next year. 

Stocks typically sell off ahead of an economic downturn, so investors may be forgiven if they find these recession odds somewhat less than reassuring. 

History sees more gains for stocks

Now for the good news. History suggests that stocks have plenty more upside to give in 2023 – although the gains are likely to be more modest than we've seen so far.

We know this based on work from the good people at Ned Davis Research. A new paper by Ed Clissold, chief U.S. strategist, and Thanh Nguyen, senior quantitative analyst, found that "strong starts to the year are followed by smaller gains the rest of the year, on average."

And what a start to the year it's been. The S&P 500 soared 19.5% on a price basis for the year-to-date through the end of July. That's the best start to a year since 1997, the Ned Davis folks found, and the 10th best start to a year since 1926.

When you consider that the tech-heavy Nasdaq Composite was up 37% on a price basis for the year-to-date through the end of July (and that the blue chip Dow Jones Industrial Average gained more than 7%), muted gains from here should be more than satisfactory. Let's not get greedy. 

To get a sense of what we might expect, Clissold and Nguyen found that in all the years since 1926 in which the S&P 500 rose at least 15% through July, the index finished the year with additional gains 86% of the time. Furthermore, the median gain for the S&P 500 from August through December was 7%. 

Put another way, history gives the broader market an 86% chance of finishing the year higher than it is now, and a 50% chance of putting up gains of at least 7%.

A more recent historical sampling of market performance is even more encouraging. Since World War II, in years in which the S&P 500 gained at least 15% through July, the benchmark index continued to rise from August through December 93% of the time. The median gain over those five months came to 7.6%.

Let's be bullish and project market performance using the more recent historical sample: if the S&P 500 were to add another 7.6% from its July 31 close, it would end the year at 4,938. That means the S&P 500 would deliver a 2023 price gain of 28.6%. Add in dividends, and the benchmark index would generate its third best total return of the past two decades. 

That's exciting stuff. And yet… it should go without saying that history is a highly imperfect guide. A lot can change in five months. If the past is anything like prologue, however, our incipient bull market should keep running. And if it does, 2023 will rank as an elite year of returns for equity investors. 

Fingers crossed.

More columns by Dan Burrows

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If you're looking for the best long-term investment stocks to buy, you have a few ways to approach the task. One is to follow the advice of Benjamin Graham, the father of value investing, in his classic book "The Intelligent Investor."

In what is one of the best books on investing, Graham suggests that a defensive investor should buy stocks of large, conservatively financed companies with good earnings power.

The companies should also have some of the best dividend stocks, with low valuations and consistent histories of payouts.

However, in today's world, many tech stocks don't pay dividends. Instead, they often return capital to shareholders through large share repurchases.

Why are stock buybacks important? "First, all the share buyback activity provides a natural buyer in the market that keeps the price elevated," as I explain in my article, "What Is a Stock Buyback?"

Second, "with fewer shares outstanding, the earnings divided by the average share count each go up."

How we chose the best long-term investment stocks

Applying Graham's criteria today, the idea is to find the best stocks to buy that return large amounts of capital to shareholders either through dividends and/or stock buybacks.

Doing so allows a company to increase its earnings and dividends per share. Moreover, a shareholder's stake rises over time. Both of these factors can push the stock price higher.

We also stick with stocks that have market caps of $100 billion or higher. They must also have low debt ratios and enough cash flow to reduce their debt, as well as pay dividends and/or buybacks.

With this in mind, here are nine of the best long-term investment stocks to buy now.

Data is as of June 5. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price.

• Market value: $4.5 trillion
• Dividend yield: 0.4%

Apple (AAPL) is the $4.5 trillion iPhone maker that's steadily emerging from overreliance on that and other devices such as Mac computers and iPads in favor of services.

The iPhone still represents more than half the company's sales. And incoming CEO John Ternus was senior vice president of hardware engineering before being named to succeed outgoing CEO Tim Cook. Ternus will replace Cook, who will remain as executive chair, on September 1.

Still, revenue from sources such as the App Store continue to increase as a share of the total. Investors are beginning to appreciate Apple's use of artificial intelligence, too. It's taken some time, but the market is showing its approval of management's vision.

Why not? The company is generating massive amounts of free cash flow (FCF), which is the money left after expenses to run, maintain and expand the business are covered. And Ternus seems more than competent enough to lead further execution of Apple's "hardware as a gateway" strategy.

Apple boosted its modest dividend in May by 4%, from 26 cents to 27 cents per share. AAPL stock yields 0.4%.

Apple's board also reauthorized a $100 billion share-repurchase program that will benefit long-term shareholders. It will raise AAPL's earnings per share over time, because there will be a lower number of outstanding shares for the income produced.

In addition, the dividend per share can rise faster than it would otherwise, since the dividend payments will be spread over fewer number of shares outstanding.

Shares traded in the market will be absorbed, effectively acting as a buying source that will push the blue chip stock higher.

Although the stock is trading well above its five-year forward price-to-earnings average, AAPL remains one of the best long-term investment stocks due to its consistent and powerful cash flow, dividends and buybacks.

• Market value: $373.1 billion
• Dividend yield: 3.8%

Chevron (CVX) is an integrated energy and chemicals company with both upstream and downstream operations in the U.S. and around the world.

Energy stocks have been volatile as the price of oil has spiked and fluctuated amid war in the Middle East between the U.S., Israel and Iran. CVX stock is now trading at a little more than 13 times forward earnings, well below its five-year average of 17 times.

And CVX meets the criteria for a good long-term investment because it's conservatively financed, produces good profits and pays an attractive dividend that it can afford.

Management continues to prioritize dividend and capital investment over share buybacks. Chevron has four decades of annual dividend hikes under its belt because, despite ups and downs for prices of oil and gas, as well as chemical industry cycles, the company has consistently produced large amounts of free cash flow.

Chevron generated about $34 billion in operating cash flow before working capital changes and about $5.5 billion in free cash flow in 2025. The company returned more than $27 billion of cash to shareholders, including share repurchases of more than $14 billion and dividends of nearly $13 billion.

These figures show how Chevron manages a fair balance between investing in the future and rewarding shareholders with its cash flow. It underscores why CVX is the kind of stock that long-term investors should have in their portfolio.

• Market value: $3.1 trillion
• Dividend yield: 0.9%

Microsoft (MSFT) operates in every key software arena: operating systems; cloud; gaming; application software; and, now, AI.

MSFT meets all the necessary qualities for being one of the best long-term investment stocks, as it has consistent earnings, is conservatively financed and generates large amounts of free cash flow. Moreover, it pays a dividend and spends most of its FCF on share buybacks.

Like many software socks, MSFT has been hit hard this year amid questions about how AI would impact Microsoft's core business. The stock is trading at 24.5 times forward earnings, well below a five-year average of 30.

Long-term investors are likely to do well with MSFT, and the reasons are simple. The company's massive cash flow, its products' ubiquity and acceptance and its shareholder rewards all work in the stock's favor.

More important, the company has plenty of room to increase its shareholder-friendly initiatives over time, because it spends just about half its free cash flow on dividends and buybacks. It plows the rest back into the company, reducing debt and making investments and acquisitions.

In the long run, Microsoft shareholders can expect the company to typically grow profits and cash flow, while consistently raising its dividends and buybacks.

Microsoft has raised its dividend for 21 consecutive years. That alone, not counting its buybacks and earnings power, makes the Dow Jones stock worthy of being a long-term investment.

• Market value: $154.4 billion
• Dividend yield: 1.4%

Charles Schwab (SCHW) is a well-known discount brokerage firm and investment banking company with which many folks are familiar.

SCHW meets all the best criteria for a long-term investment value strategy. It's conservatively financed, and it pays a consistent dividend.

As for that dividend, Schwab has consistently paid a dividend for 35 years, well above the 10-year average in its sector. Moreover, Schwab's most recent return on equity was 19.1%, well above its historical median of 13.7% and a sign of strong earnings power.

Jefferies analyst Dan Fannon has a Buy rating on the financial stock. "SCHW has an industry-leading platform that drives midsingle-digit organic growth at scale," Fannon writes.

The analyst pointed to additional potential synergies for both expenses and revenues following the integration of TD Ameritrade, and also cites positive balance sheet trends as well as continued franchise momentum.

"SCHW expects its capital management framework to remain opportunistic," Fannon adds. "The firm continues to prioritize capital levels that support (long-term) business growth and will look for ways for opportunistically returning capital to stockholders." The analyst forecast $6.2 billion in buybacks in 2026.

• Market value: $104.8 billion
• Dividend yield: 3.2%

Medtronic (MDT) is a $105 billion medical device and therapies company that was co-founded by one of the inventors of the pacemaker. The company is extremely profitable, which allows it to pay generous dividends and buy back big blocks of its own shares.

Medtronic pays a $2.88 annual dividend that will likely continue to rise. Management has raised the dividend for 49 straight years.

Share buyback activity has slowed from fiscal 2025, when Medtronic bought back $2.7 billion of its own shares. But every little bit helps towards allowing the company to keep raising its dividend. In addition, at just 13.6 times forward earnings, the stock is inexpensive.

Meanwhile, Medtronic has about $27.8 billion in net debt on its balance sheet, which is less than its $49.0 billion in shareholders' equity. The company's cash flow should continue to recover from supply chain issues we've seen in recent years, allowing Medtronic to reduce its debt reliance over time.

Given its powerful cash flow and shareholder returns, MDT is one of the best long-term investment stocks.

• Market value: $198.8 billion
• Dividend yield: 2.7%

McDonald's (MCD) is known to just about every investor as well as every American. But few realize it's actually one of the best long-term investment stocks because it generates large amounts of free cash flow.

In 2025, McDonald's produced $7.2 billion in FCF. That represents about 3% of its approximately $200 billion market capitalization.

Management uses that free cash flow to fund a generous dividend and stock buyback program. Last year, McDonald's paid $7.1 billion across these shareholder-friendly initiatives.

While some folks might not like MCD's quick-service restaurant fare, plenty of others do. They love its menu, buy McDonald's fries and hamburgers and generally can't get enough of its food.

Moreover, the company is conservatively financed, as its $40 billion in long-term debt is well-matched by the company's ongoing FCF generation. In addition, shareholders have benefited from its history of annually raising its dividend in the past 50 years.

MCD stock looks cheap right now on a historical basis. It currently trades at 21.4 times forward earnings, below its five-year average of 24.4. Nevertheless, everyone is "lovin" MCD stock for the long term.

• Market value: $341.2 billion
• Dividend yield: 2.9%

Procter & Gamble (PG) is a $340 billion consumer products giant with many iconic brand names — including Downy detergent, Mr. Clean cleaning supplies and Head & Shoulders shampoo — that produce large amounts of cash flow for the company.

Most everyone knows Procter & Gamble's brands and is familiar with their solid reputations. But few realize how incredibly profitable the company actually is and why PG is one of the best long-term investment stocks to buy.

For example, for its fiscal third quarter (ended March 31), PG generated $4 billion in operating cash flow and $3 billion in free cash flow.

The FCF represents a notable 14.3% of P&G's $21.2 billion in quarterly sales, which is a high free cash flow margin for a consumer products company. Some software companies don't make those kinds of margins.

This FCF also funds massive dividends and buybacks for shareholders. The company has raised its dividend annually for the past 70 years. Management said it expects to buy back approximately $5 billion in stock this fiscal year. That represents about 1.5% of its current market capitalization.

Meanwhile, PG is cheap at the moment relative to its historical valuation. It trades for 21.1 times earnings, which is below its five-year average of 23.5.

Procter & Gamble generates large amounts of cash flow from its brands and is working diligently to return value to shareholders. That makes it one of the best long-term investments value buyers can make.

• Market value: $342.0 billion
• Dividend yield: 2.7%

Coca-Cola (KO) is an iconic beverage company that generates large amounts of cash flow for its shareholders from its well-known brands such as Coke, Diet Coke, Fanta, Powerade and Minute Maid.

That makes it one of the best long-term investments a value buyer can make — just ask Warren Buffett, whose Berkshire Hathaway (BRK.B) holding company is KO's top shareholder.

What makes KO so attractive is that it's one of the best dividend stocks on Wall Street, having increased its payouts consistently for the last 64 years straight. Most recently, Coca-Cola hiked its dividend by 4% in February.

Today, KO stock yields an attractive 2.7%, and investors can expect the dividend payout to keep increasing.

On top of that, Coca-Cola has a strong stock buyback program, including approximately $400 million in net purchases during 2025 on a current repurchase authorization of $5.2 billion.

KO's dividends and share buybacks are made possible by the $5.2 billion in free cash flow the company generated in 2025.

For the long-term investor, this consumer staples stock looks like a good investment, given its strong cash flows and shareholder-friendly initiatives.

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Imagine a company that's enjoyed overwhelming success in its key markets for ages and also claims one of the most valuable and recognizable brands in the world.

This company was so important to both its sector and the broader economy that it was a component of the Dow Jones Industrial Average for nearly a quarter of a century.

One would expect this blue chip stock to have been an outstanding buy-and-hold bet. To be fair, for a good long while, it was.

That was then. This is now.

Unfortunately, the former Dow Jones stock we're talking about is Intel (INTC).

Shares almost doubled in 2023, helped by a multibillion-dollar cost-cutting campaign and the generalized euphoria surrounding all things artificial intelligence (AI). Intel bulls harbored hopes that the year marked an inflection point for the long-time market laggard.

It hasn't worked out that way. Intel fell as much as 60% from its late 2023 peak before climbing back to about breakeven today. Heck, shares remain about 33% below their all-time high.

It's hard to believe now, but once upon a time, INTC was one of the best stocks on the planet. Cut to the present, and it's not clear if the company can reclaim its glory days.

Intel still dominates the markets for central processing units (CPUs) for PCs and servers, but it's been losing share to rivals at an accelerating rate for some time. Nvidia (NVDA) and Advanced Micro Devices (AMD) are just a couple of its formidable competitors.

Where the semiconductor company really went wrong — apart from execution missteps and manufacturing delays — is the way it missed some of the biggest changes in technology. Intel famously whiffed on mobile, and now Nvidia is running away in generative AI.

There's a reason Nvidia replaced Intel in the Dow Jones Industrial Average in 2024.

It's been a curious ride for INTC investors. Thanks to its dot-com era heyday, Intel was one of the 30 best stocks in the world from 1990 to 2020.

In those three decades, INTC stock generated more than $340 billion in wealth for shareholders, or an annualized dollar-weighted return of 16%, says Hendrik Bessembinder, a finance professor at the W.P. Carey School of Business at Arizona State University.

However, the past two decades of that 30-year span have been another story.

The bottom line on Intel stock?

If you go all the way back to Intel's debut in the early 1970s as a publicly traded company, it beats the broader market handily. The chipmaker's annualized all-time total return stands at 14.4%. The S&P 500's annualized total return comes to 10.8% in the same span.

If you look at pretty much any other standardized period, an investment in INTC has been a major dud.

Intel stock trails the broader market by distressingly wide margins in the past five-, 10- and 20-year periods. Indeed, its five-year annualized total return is negative.

What does this sort of performance look like on a brokerage statement? Nothing short of ugly.

Have a look at the above chart, and you'll see that if you invested $1,000 in Intel stock 20 years ago, today your stake would be worth about $4,000, or an annualized total return of 7.4%.

The same amount invested in the S&P 500 would theoretically be worth about $7,000 today. That's good for an annualized total return of 11%.

As illustrious and iconic as the Intel brand might be, Intel stock has been nothing but a sinkhole of opportunity cost for buy-and-hold investors for a very long time.

So where does INTC stock go from here? Wall Street is mostly sitting on the sidelines, giving it a consensus recommendation of Hold. Of the 47 analysts covering Intel surveyed by S&P Global Market Intelligence, eight call it a Strong Buy, one says Buy and 32 have it at Hold. Four analysts rate INTC at Sell, while two say it's a Strong Sell.

Among their worries: the company is in the midst of a major restructuring as it struggles to right its floundering foundry business. True, the federal government took a 10% equity stake in 2025, and that's given INTC stock a boost. However, the foundry business continues to generate operating losses and is having difficulty lining up outside customers, among other issues.

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Few companies are more closely associated with the rise and dominance of the American technology industry over the course of the 20th century than International Business Machines (IBM).

The company that came to be known as Big Blue is sort of the O.G. of big tech stocks. IBM, founded before World War I, became the industry leader in pretty much every market it entered, from early punch-card tabulating systems to electric typewriters to mainframe and personal computers.

IBM stock was a fantastic buy-and-hold bet over those many decades. From 1926 to December 2019, IBM created $525.9 billion in shareholder wealth, according to research by Hendrik Bessembinder, a finance professor at the W.P. Carey School of Business at Arizona State University.

Only seven U.S. stocks generated better returns for shareholders over that span.

Times change. IBM ceded ground to any number of peers, including some of the Magnificent 7 stocks sporting multitrillion-dollar market caps today. The result? Shares in this long-time Dow Jones stock have been a major disappointment for decades.

As a member of the S&P 500 Dividend Aristocrats, IBM is a top-notch name for dependable dividend growth. Not only has the company paid consecutive quarterly dividends since 1916, it has increased its payout annually for 30 years and counting.

However, even after factoring in those reliable and rising dividends, IBM stock has been a market laggard over the long haul.

The bottom line on IBM stock?

IBM stock has been mounting a comeback over the past few years, but as a truly long-term holding, it's been a serious market laggard.

Here's the breakdown: IBM stock's all-time annualized total return (price change plus dividends) comes to 4.6%. The S&P 500 generated an annualized total return of 10.8% over the same span.

It doesn't end there. Shares in the tech giant beat the broader market on an annualized total return basis in the past three- and five-year periods, but lag badly over longer time frames.

It should come as no surprise that if you invested a grand in IBM stock a couple of decades ago, you would be deeply disappointed by the results today.

Have a look at the above chart, and you'll see that if you put $1,000 into IBM stock 20 years ago, it would be worth about $5,700 today. That's good for an annualized total return of 9.1%.

The same sum socked away into an S&P 500 index fund over the past two decades would be worth almost $8,300 today, or 10.9% annualized.

The bottom line? Big Blue has been a buy-and-hold bust in the 21st century.

As for where IBM stock goes from here, Wall Street is cautiously bullish on the name. Of the 22 analysts covering the stock surveyed by S&P Global Market Intelligence, 10 call it a Strong Buy, two say Buy, eight have it at Hold, one says Sell and one rates it at Strong Sell. That works out to a consensus recommendation of Buy with mixed conviction.

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Nvidia (NVDA) in 2023 established itself as the market's runaway favorite way to bet on the explosive growth of generative artificial intelligence (AI). And NVDA stock has the outsized returns and trillion-dollar market capitalization to prove it. 

Latecomers might figure that the easy money in NVDA stock has already been made. But thanks to Nvidia's market dominance and first-mover advantage, Wall Street believes shares in the chipmaker powering the AI revolution have plenty of upside left.

That's remarkable considering that Nvidia stock has more than tripled in value for the year-to-date through early November. 

Indeed, the maker of graphic processing units (GPUs) added roughly $800 billion in market capitalization in 2023 alone. To put that in perspective, competitor Intel (INTC), a component of the Dow Jones Industrial Average, has a market value of $160 billion. Rival Advanced Micro Devices (AMD) has a market cap of $180 billion. 

In other words, NVDA's market value this year has expanded by the equivalent of five INTCs or four AMDs. 

NVDA stock was up 211% for the year-to-date through November 6, pushing its market cap up to $1.12 trillion. If the idea is to buy low, then it's perhaps reasonable to assume that it's far too late to add Nvidia stock to your portfolio. 

Most industry analysts, however, would beg to differ.

Nvidia's iPhone moment?

The world is suddenly awash in all sorts of AI wizardry, with more sites and tools and apps coming every day. And Nvidia's place in this ecosystem couldn't be more enviable. It's churning out a new generation of advanced chips to power the data centers tasked with making the calculations that conjure all this AI magic.

Demand is so great for Nvidia's hardware that the company's second-quarter revenue more than doubled year-over-year to $13.5 billion. Analysts were looking for revenue of "only" $11.1 billion. For the full fiscal year, Wall Street expects the company to post revenue of more than $54 billion – a 100% increase over last year's revenue of $27 billion. 

The key to the investment thesis on NVDA stock is that AI data centers will continue to have an almost insatiable need for Nvidia's products. Naturally, traders and investors could not be more elated. That's certainly understandable given what they see as historical precedent. As Nvidia CEO Jensen Huang said in an interview last spring, the company has been preparing for years to take advantage of the AI craze.

"I call it the iPhone moment,” Huang told The Wall Street Journal, comparing NVDA's position in generative AI to the way Apple's (AAPL) iteration of the smartphone essentially ushered in a new era of tech. "All the technology came together and helped everybody realize what an amazing product that can be and what capabilities it can have."

Analysts: Nvidia stock is still a buy

Long-time followers of Nvidia stock probably already know that it happens to be one of the best stocks of the past 30 years. Between 1990 and 2020, NVDA created $309.4 billion in wealth for shareholders, according to calculations by Hendrik Bessembinder, a finance professor at the W.P. Carey School of Business at Arizona State University. Indeed, NVDA stock was good for an annualized dollar-weighted return of almost 28% over that span.

Nvidia stock has also generated stupendous wealth for anyone who picked it up a couple decades ago. If you put a mere $1,000 into Nvidia stock 20 years ago, you would have enjoyed an annualized return of almost 34%. 

And now, even with shares having more than tripled in 2023, the Street is still pounding the table for Nvidia stock. Of the 53 analysts issuing opinions on NVDA surveyed by S&P Global Market Intelligence, 38 rate it at Strong Buy, 12 say Buy and three have it at Hold. That works out to a rare consensus recommendation of Strong Buy, with high conviction to boot. 

As for where the Street thinks NVDA is headed, analysts' average price target stands at $641.37. That gives Nvidia stock implied upside of about 40% in the next 12 months or so. 

The bottom line? Nvidia stock might be trading near record highs, but the Street says this rally is far from finished. Have a look at the list of hedge funds' top stocks picks or stock picks that billionaires love and you'll see that much of the so-called smart money wholeheartedly agrees.

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The Federal Reserve is in a tricky spot these days as the central bank's rate-setting committee gathers for its next meeting.

On the one hand, economic growth remains solid and inflation remains above the Fed's long-term target. Price pressures could resurface as a result of President Donald Trump's tariff policies.

On the other, the jobs outlook is weakening, and too many folks are priced out of the housing market. Meanwhile, economists, strategists and investors are increasingly concerned about the central bank's independence going forward.

December's CPI report showed that consumer inflation held steady at 2.7%, relieving pressure on the Federal Open Market Committee (FOMC), the Fed's rate-setting panel, to raise rates. We should see further cooling ahead thanks to easier comparisons.

"The 12-month inflation rate for all prices will drop in January through March, but mostly because of strong price increases a year ago raised the base for the year-over-year calculation," writes Kiplinger economist David Payne.

Sluggish hiring, meanwhile, leaves the possibility of future rate cuts on the table.

These twin pulls make the Fed likely to leave the short-term federal funds rate unchanged at its next meeting, experts says.

"Firmer economic growth may be translating into some welcome improvement in labor markets, which should be sufficient to sideline the FOMC at month's end," writes Sal Guatieri, senior economist at BMO Capital Markets. "At the same time, the peak-tariff effect on inflation could be in the rearview mirror, opening the door for more rate cuts this year."

When you consider the Fed's dual mandate against the backdrop of sticky inflation and a softening labor market, it makes sense that folks are obsessed with tracking when the next Fed meeting is coming up.

Lower interest rates today equal higher returns for equities tomorrow.

The next Fed meeting: What to expect

As you can see from the FOMC meeting calendar below, the committee meets eight times a year, or about once every six weeks. The FOMC is required to meet at least four times a year and might convene additional meetings if necessary. The convention of meeting eight times per year dates to the market stresses of 1981.

FOMC meetings last two days and conclude with the committee releasing its policy decision at 2 pm Eastern Standard Time. The Fed chief then holds a press conference at 2:30 pm. (Pro tip: As closely scrutinized as the Fed statement might be, market participants are usually even more keen on what the Fed chair has to say in the press conference.)

As for the next Fed meeting, it will begin on Tuesday, January 27, and conclude with a policy statement on Wednesday, January 28, at 2 pm EST.

As of January 20, interest rate traders assigned a 97% probability to the FOMC leaving the fed funds rate unchanged at a target range of 3.50% to 3.75%, according to CME FedWatch.

That's up from 78% a month ago. The odds of a quarter-point cut stood at 3%, down from 22% last month.

The schedule of upcoming Fed meetings is listed below, courtesy of the FOMC.

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Apple (AAPL) stock has been in a slump since notching a record high at the end of 2025, but that means little to truly long-term investors.

Recall that at one point last year, AAPL stock lost as much as 30% of its value. Shares soon went on a remarkable run, adding about $1.6 trillion to the company's market cap in only eight months.

Given that context, a 9% drawdown from AAPL's December record is just the cost of doing business. If you want to own equities, volatility is merely the price of admission.

Truly long-term buy-and-hold Apple investors already know this. After all, they've been through these sorts of things many times before – and have been rewarded with incomparable returns over the past few decades.

As famed speculator Jesse Livermore once said, the big money is made by "sitting tight." If any stock proves the wisdom of his words, it's Apple.

From January 1990 through December 2020, AAPL stock created $2.67 trillion in shareholder wealth, or an annualized dollar-weighted return of 23.5%, according to an analysis by Hendrik Bessembinder, a finance professor at the W.P. Carey School of Business at Arizona State University.

Indeed, per Bessembinder's findings, which account for a stock's increase in market cap adjusted for cash flows in and out of the business and other adjustments, Apple was the best stock in the world over those 30 years.

True, AAPL stock traded sideways for the first few years of the 21st century, but an explosion of innovation soon put an end to that.

Under the visionary leadership of the late Steve Jobs, Apple essentially reinvented itself for the mobile age, launching revolutionary gadgets such as the iPod, MacBook and iPad.

But what really set Apple on its course to becoming the world's third-largest publicly traded company – and one of hedge funds' favorite blue chip stocks – was the 2007 debut of the iPhone.

Today, Apple isn't just a purveyor of gadgets; it sells an entire ecosystem of personal consumer electronics and related services. And it's a sticky ecosystem at that.

No less an eminence than Warren Buffett has called the iPhone maker Berkshire Hathaway's (BRK.B) "third business," noting Apple fans' fantastic brand loyalty as one reason for being all-in on the stock. (Apple accounts for more than fifth of the value of the Berkshire Hathaway equity portfolio.)

True, Berkshire Hathaway cut its Apple stake sharply over the past year, but that was because the holding company believes that corporate taxes are likely to rise at some point in the future. Bulls needn't worry about Berkshire losing its taste for the stock. Warren Buffett adores Apple as much as ever.

Little wonder the iconic tech firm was tapped to become one of the elite 30 Dow Jones stocks. In 2015, Apple replaced AT&T (T) in the Dow Jones Industrial Average.

The bottom line on Apple stock?

Over the past 20 years Apple stock generated an annualized total return (price change plus dividends) of 27.4%. By comparison, the S&P 500 delivered an annualized total return of 10.8% over the same span.

What does that look like on a brokerage statement? Check out the chart below and you'll see that if you invested $1,000 in Apple stock 20 years ago, it would today be worth about $130,000.

The same $1,000 invested in an S&P 500 index fund would theoretically have turned into less than $8,000 over the same period.

For those wondering if Apple stock is a buy at current levels, Wall Street certainly thinks so.

Of the 48 analysts covering AAPL surveyed by S&P Global Market Intelligence, 25 rate it at Strong Buy, six say Buy, 15 have it at Hold, one says it's a Sell and one has it at Strong Sell.

That works out to a consensus recommendation of Buy, with high conviction.

More Stocks of the Past 20 Years

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Nvidia (NVDA) cemented its place as the market's favorite bet on artificial intelligence (AI) three years ago and it shows no signs of letting up.

Indeed, the company has become so important to investors that Nvidia's earnings report helps set the tone for trading for the broader market.

To recap: OpenAI's ChaptGPT kicked off the AI frenzy at the end of 2022. Seemingly insatiable demand on the part of AI hyperscalers for Nvidia's graphics processing units (GPUs) propelled NVDA stock past $1 trillion in market capitalization midway through 2023.

It took only about eight months for yet another blowout quarterly earnings report to push Nvidia stock past the $2 trillion mark.

Cut to early 2024 when Nvidia's over-the-top first-quarter earnings – plus a NVDA stock split and a dividend hike – pushed its market cap past $3 trillion.

As of this writing, Nvidia, which replaced Intel (INTC) in the Dow Jones Industrial Average in late 2024, is the world's largest publicly traded company. Indeed, it became the first company to top $4 trillion in market cap in July 2025. Four months later, Nvidia briefly exceeded $5 trillion in market cap before shares eased back.

But then, long-time shareholders should be used to such outsized rewards and risks by now.

That's because volatility has always been the price of admission to this long-time market beater. True, Nvidia, a highly cyclical semiconductor stock, has vastly outperformed the broader market since going public at the end of the last century.

Quite naturally, it has done so with several vertiginous ups and downs along the way.

After losing half its value in 2022, NVDA stock more than tripled on a price basis in 2023, vs a gain of 24% for the S&P 500.

And as for 2024? Nvidia stock gained more than 170% vs a 25% rise in the broader market. The stock once again led the broader market in 2025, albeit by "only" 21 percentage points.

Nvidia's market-beating ways go much farther back than most folks might know, however. In fact, few stocks have done more for investors over the past few decades than Nvidia.

From its initial public offering at $12 a share in January 1999 through December 2020, NVDA stock created $309.4 billion in shareholder wealth, according to an analysis by Hendrik Bessembinder, a finance professor at the W.P. Carey School of Business at Arizona State University.

Indeed, per Bessembinder's findings, which account for a stock's increase in market value adjusted for cash flows in and out of the business and other factors, Nvidia was one of the 30 best stocks over that 30-year time frame.

Looked at another way, over its life as a publicly traded company, Nvidia stock generated an annualized total return of 37.1%. The S&P 500, with dividends reinvested, returned an annualized 10.8% over the same period.

Importantly, most of the shareholder wealth generated by Nvidia came over just the past few years. That's because back in the day, the primary market for Nvidia's chips consisted of PC and console video game enthusiasts.

Happily for Nvidia, it just so happens that the company's powerful GPUs and related intellectual property are indispensable to the fields of artificial intelligence, professional visualization, cryptocurrency mining and more.

As noted above, NVDA processors are in demand for use in data centers – and especially data centers that power generative AI. Indeed, the company is struggling to keep up with orders from hyperscalers such as Microsoft (MSFT), Meta Platforms (META), Amazon.com (AMZN) and Alphabet (GOOGL).

Few blue chip stocks offer so much exposure to so many emerging endeavors, which helps explain NVDA stock's amazing returns over the longer haul. AI has been NVDA's afterburner.

But as remarkable as the company's business may be, it doesn't quite get to the heart of what NVDA stock has meant to long-term shareholders and their brokerage statements. For that, consider the following facts about Nvidia stock.

The bottom line on Nvidia stock?

Over the past two decades, Nvidia stock generated an annualized total return (price change plus dividends) of 37.2%. The S&P 500, by comparison, generated an annualized total return of 10.9% over the same span.

What does that mean in dollar terms? Have a look at the above chart and you'll see that if you invested $1,000 in Nvidia stock 20 years ago, it would today be worth more than $560,000. The same amount invested in an S&P 500 index fund would theoretically be worth not quite $8,000 today.

As for adding to NVDA at current levels, the Street remains bullish even after the stock's incredible run. Indeed, NVDA rates as a top Dow Jones stock to buy.

Of the 63 analysts issuing opinions on Nvidia stock surveyed by S&P Global Market Intelligence, 49 rate it at Strong Buy, 11 say Buy, two call it a Hold and one has it at Strong Sell.

That works out to a rare consensus recommendation of Strong Buy. Indeed, Nvidia ranks among analysts' top S&P 500 stocks to buy now.

Speaking for the bulls, Oppenheimer analyst Rick Schafer says the AI build-out is still in its early days.

"Nvidia has transformed from a graphics company to a premier leading full stack AI solutions platform company," notes the analyst, who rates NVDA at Outperform (the equivalent of Buy.) "Compute continues to chase demand. NVDA ubiquitous AI platform best positioned to win."

Just remember that NVDA is ultimately a chip company, and the semiconductor industry is cyclical. As exciting as the AI build-out may be, Nvidia's growth prospects could still one day change.

More Stocks of the Past 20 Years

• If You'd Put $1,000 Into Microsoft Stock 20 Years Ago, Here's What You'd Have Today
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• If You'd Put $1,000 Into Walmart Stock 20 Years Ago, Here's What You'd Have Today

Blue chip stocks, thanks to their massive market capitalizations and deep liquidity, are a natural home for hedge funds and other large pools of institutional capital.

And since hedge funds are the putative smart money, who wouldn't want to know which blue chip stocks they're chasing with their capital?

True, hedge funds collectively have a rather poor long-term track record vs the broader market. It should also go without saying that not all blue chip stocks are created equal.

Yet there's still something irresistible about knowing what hedge funds have been up to. And even if the industry tends to generate disappointing returns, you've got to give it credit when credit is due.

Big-time investors are willing to pay up for complicated strategies offering exposure to uncorrelated assets. So it's not necessarily possible to tell from the outside if a hedge fund is providing its clients with the performance they expect.

It's also important to know that hedging strategies, by definition, limit upside when stocks are rising. That helps explain the industry's tendency to underperform in a bull market.

By the same token, however, hedging strategies limit downside when everything is selling off. And goodness knows investors saw plenty of red on their screens the last time stocks tanked.

"Despite the challenges from a bear market, hedge funds delivered resilient performance in 2022," notes Barclays Capital Solutions. "In a year when the MSCI World Index fell 18%, hedge funds captured only a fraction of the drawdown, thus offering the best downside protection since the dot-com bubble burst."

Cut to today, however, and a three-year bull market has hedge funds trailing the main benchmark for U.S. equity performance once again.

Blue chip stocks: timing is everything

Indeed, the Barclay Hedge Fund Index delivered a total return (price change plus dividends) of 12.6% in 2025. The S&P 500, by comparison, generated a total return of nearly 18% last year. Hedge funds lagged the broader market by even wider margins in 2023 and 2024.

So it should come as no surprise that a strong start to 2026 has hedge funds lagging once again. For the year-to-date through April, the S&P 500 returned 5.7%. That beat the hedge fund index by 1.3 percentage points.

We won't know how hedge funds are dealing with the current market environment until they disclose their second-quarter buys and sells in mid-August. But we do know what they were up to in Q1 thanks to a recent batch of regulatory filings.

As usual, hedge funds were heavily invested in most of the market's biggest and bluest of blue chip stocks — particularly Dow Jones stocks. Indeed, 10 of the 21 names listed below are components of the blue-chip barometer.

That's partly a function of Dow stocks' massive market caps and attendant liquidity, which, as noted, provide ample room for institutional investors to build or pare large stakes.

Big-name blue chip stocks also carry lower levels of reputational risk for professional money managers. It's a lot easier to justify holding a large stake in a Dow component than a no-name small-cap stock if restive clients start grumbling about their returns.

What's interesting about the latest data is how hedge funds have become more selective regarding the almighty Magnificent 7 stocks. While some artificial intelligence (AI) plays enjoyed net inflows, most Mag 7 names were hit with net selling.

Have a look at the chart below to see hedge funds' 21 top blue chip stock picks as of the end of Q1.

Source: WhaleWisdom and the Securities and Exchange Commission.

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Warren Buffett's Berkshire Hathaway (BRK.B, $302.82) took advantage of the market's second-quarter swoon to add to its stakes in Apple (AAPL, $173.16), Chevron (CVX, $156.80), Occidental Petroleum (OXY, $64.34) and a handful of other stocks, but the holding company didn't make any exciting or surprising new moves, a regulatory filing made late Monday revealed.

Chairman and CEO Buffett, along with co-portfolio managers Ted Weschler and Todd Combs, were once again net purchasers of equities during the three months ended June 30, although their pace of buying slowed considerably compared with Q1.

After subtracting sales, Berkshire spent $3.8 billion on stocks during the second quarter, down from net purchases of $41 billion in equities during the first three months of 2022. The S&P 500 lost more than 16% of its value during the second quarter. Suffice to say that Buffett and his lieutenants were once again greedy when others were fearful.

It's also worth noting that Buffett and his subalterns' buying stands in stark contrast to last year's second quarter, when Berkshire was a net seller of equities. And, for good measure, Buffett also spent $1 billion buying back Berkshire Hathaway stock during Q2.

Among the notable additions, Buffett bought another 3.9 million shares in Apple, which is Berkshire's largest position by a wide margin.

The company owned nearly 895 million shares in the iPhone maker, a stake worth $122.3 billion as of June 30. AAPL accounted for 41% of Berkshire's portfolio value at the end of Q2. That's down from 43% at the end of the first quarter due to a slump in Apple's share price.

Buffett has also been aggressively adding to Berkshire's stake in Occidental Petroleum. Berkshire bought an additional 9.6 million shares – worth about $530 million – in the integrated oil and gas firm in late June. The holding company again added to its stake in July, buying another 4.3 million OXY shares worth $250 million.

Including warrants, Berkshire owns roughly 30% of OXY's shares outstanding. Naturally, the conglomerate's large and growing position in OXY is fueling speculation that Buffett could be eyeing a buyout of Occidental Petroleum.

In some other notable purchases, Berkshire topped off existing stakes in Chevron, Celanese (CE, $116.22), Paramount Global (PARA, $26.55) and Ally Financial (ALLY, $35.68)

On the other side of Berkshire's ledger, the company exited what remained of its small stake in Verizon (VZ, $45.55), the only telecommunications stock in the Dow Jones Industrial Average. Berkshire also closed out its short-lived position in Royalty Pharma (RPRX, $43.87).

In other stock sales, Berkshire slashed its stake in Store Capital (STOR, $29.24) by more than 50%. Buffett also reduced Berkshire's exposure to General Motors (GM, $39.40) and Kroger (KR, $47.52).

Ultimately, however, Buffett and his lieutenants had themselves a relatively quiet quarter, making mostly immaterial moves. The Berkshire Hathaway portfolio is highly concentrated, after all, with its top five holdings accounting for 75% of the total portfolio value. STOR, GM and KR don't really move the needle here.

And so although Berkshire went on a shopping spree in Q2, it mostly consisted of bargain hunting in a few of Buffett's favorite names. Investors looking for new stock or sector ideas based on the Oracle's Q2 moves didn't get much, if anything, to work with.

Warren Buffett's Berkshire Hathaway (BRK.B, $326.60) is having a great year in a down market, and on March 16, it quietly hit a milestone. The company's far-lesser-traded Class A shares closed above $500,000 for the first time in their history.

That’s right. A piece of Buffett’s holding company costs more than a cool half-million per share.

BRK.A, which crossed $5,000 way back in 1989, first broke $500,000 on an intraday basis on March 14, but closed just shy of that level. Two days later, however, it held on. The Class A shares have attained such a shocking dollar amount because Buffett has never split the stock. That’s intentional. The high price of admission to the Class A shares helps attract long-term investors and discourages speculation, is Buffett's thinking, and he told shareholders as much in 1984.

Of course, most investors still have access to Warren Buffett’s investing acumen via the more accessible Berkshire Hathaway Class B shares, which currently trade around $335 each. The Class B shares, created in 1996, remain at reasonable levels thanks to the 50-to-1 split required to facilitate Berkshire's acquisition of railroad operator Burlington Northern Santa Fe in 2010.

Happily, investors in both share classes are enjoying considerable outperformance amid an otherwise painful start to 2022. BRK.A was up 11.5% for the year-to-date through March 16, closing its record-breaking day at $504,036. BRK.B added 12.5% over that span.

The S&P 500? It’s off by 8.6%.

Berkshire Shares Are Long-Term Winners, Too

The fact that Class A shares have never split explains their half-million-dollar price tag, but that shouldn't diminish Buffett's role in getting them to their lofty level. Folks don't call him the greatest long-term investor of all time for nothing.

For one thing, Berkshire Hathaway is the 12th best stock of the past 30 years, according to Hendrik Bessembinder, a finance professor at the W.P. Carey School of Business at Arizona State University. Under Buffett's stewardship, BRK.A and BRK.B created $504.1 billion in wealth for shareholders, or 11.7% annualized, between January 1990 and December 2020.

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Longer term, Buffett's performance is pretty much untouchable. Berkshire's return more than doubled that of the S&P 500 since 1965, notes Argus Research – or a compound annual growth rate of 20.1% vs. 10.5% for the index.

Putting it perhaps most evocatively is Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. He notes that if you had invested $10,000 in Berkshire Hathaway in 1968 and left it untouched for 50 years, your nut would have grown to $85 million.

Buffett's unparalleled investment returns and his refusal to split the Class A shares make them by far and away the most expensive stock in the world, per data from S&P Global Market Intelligence. For context, Swiss chocolate maker Lindt & Sprüngli AG (LDSVF) comes in a distant second, with a home exchange price of about 108,200 Swiss francs (or $115,078).

Here are some other ways to put BRK.A's $504,000 stock price in perspective. A single Berkshire Class A share is …

• 1.23 times the median sales price of a house in the U.S. (~$408,100).
• 2.5 times the average annual wage of an American CEO (~$198,000).
• 130,208 McDonald's hamburger Happy Meals.

To be sure, there's nothing special about BRK.A closing above $500,000 a share – not even psychologically. Only 615,160 shares are available for trading, average daily volume is 1,940 shares, and, uh, they cost around $500,000 a pop. It's not like retail investors are going to chase these prices higher on surging volume.

But it's a fun milestone to note and a tribute to the power of buy-and-hold (and hold and hold and hold) investing. And then some.

The market is poised for one of the worst first halves of a year in history, but the best blue-chip dividend stocks never go out of style. Or at least, that has been true for the top-rated Dow dividend stocks thus far in 2022.

Back in February, we noted that the top-rated dividend payers among the 30 Dow Jones stocks were beating the market handily, and we figured they would continue to give income investors some much-needed peace of mind.

Indeed, they did. As you can see in the chart below, a cap-weighted index of the five top-rated Dow dividend stocks yielding at least 2% as of Feb. 14 has generated a total return (price appreciation plus dividends) of 11% in 2022. By comparison, the S&P 500's year-to-date total return stands at negative 17.5%.

Given the success of our initial index, we decided to update the components for the second half of 2022.

The Dow's Top Dividend Stocks Right Now

Here's how we found the Dow's best dividend stocks to buy now. Using data from S&P Global Market Intelligence, we screened the blue chip barometer for Wall Street analysts' highest-rated Dow components with dividend yields of at least 2.0%.

A quick note on S&P Global Market Intelligence's ratings system: S&P surveys analysts' stock calls and scores them on a five-point scale, where 1.0 equals a Strong Buy and 5.0 is a Strong Sell. Any score equal to or below 2.5 means that analysts, on average, rate the stock at Buy. The closer a score gets to 1.0, the stronger the consensus Buy recommendation.

That led us to the following five Dow Jones dividend stocks, which we list below by strength of analysts' consensus recommendations, from lowest to highest conviction. (Market data and analysts' ratings are as of June 24.)

5. Goldman Sachs

• Market value: $104 billion
• Dividend yield: 2.6%
• Analysts' consensus recommendation: 2.11 (Buy)

After falling by more than 20% so far in 2022, shares in Goldman Sachs (GS, $302.75) look like a screaming bargain, analysts say.

That's because GS stock trades for less than the firm's book value. Book value is the value of a company's assets in liquidation. Goldman is not only profitable, but most of its assets are highly liquid securities. If GS stock trades for a price/book value below 1.0, it's probably on sale.

"The company has a strong franchise and there are multiple revenue, cost and capital optimization strategies that can be implemented, but the market is still valuing the stock as though the returns will remain unchanged indefinitely," writes Oppenheimer analyst Chris Kotowski, who rates shares at Outperform (the equivalent of Buy).

Kotowski has plenty of company on the Street. Of the 27 analysts issuing opinions on GS tracked by S&P Global Market Intelligence, eight call it a Strong Buy, eight rate it at Buy and 11 have it at Hold. Their average target price of $416.81 gives GS implied upside of about 38% in the next 12 months or so. Add in the dividend yield, and the implied total return tops 40%.

4. Merck

• Market value: $235.5 billion
• Dividend yield: 3.0%
• Analysts' consensus recommendation: 2.04 (Buy)

A year-to-date price gain of more than 20% makes Merck (MRK, $93.13) the second-best performing Dow stock in 2022, and analysts see more upside ahead.

True, the Street has become incrementally less bullish on this healthcare stalwart over the past few months as its stock has closed in on its price targets. Nevertheless, analysts' consensus recommendation stands at Buy, with solid conviction.

Of the 24 analysts issuing opinions on Merck's stock, nine rate it at Strong Buy, five say Buy and 10 call it a Hold, per S&P Global Market Intelligence. With an average target price of $96.86 and a 3% dividend yield, the Street gives MRK an implied total return (price plus dividends) of 7%.

Although bears worry about Merck's reliance on blockbuster cancer drug Keytruda, which will lose patent exclusivity in 2028, bulls say such fears are overblown.

"While Keytruda is a key growth driver, the COVID-19 antiviral Lagevrio will make a substantial contribution in 2022," writes Argus Research analyst David Toung (Buy).

3. Coca-Cola

• Market value: $273.3 billion
• Dividend yield: 2.8%
• Analysts' consensus recommendation: 1.88 (Buy)

When it comes to finding the best stocks for a bear market, few names in the defensive consumer staples sector can match Coca-Cola (KO, $63.04).

Shares are beating the broader market by about 25 percentage points in 2022, and analysts see more outperformance ahead.

KO was hit hard by pandemic lockdowns, which shuttered restaurants, bars, cinemas and other live venues. But those sales are now bounding back. Analysts likewise praise Coca-Cola's ability to offset input cost inflation with pricing power.

"We think KO's strong fourth-quarter results reflect its brand power and ability to thrive in an inflationary environment, as top line improvement was entirely driven by price and mix," writes CFRA Research analyst Garrett Nelson (Buy).

Twelve analysts rate Coca-Cola's stock at Strong Buy, six say Buy, seven have it at Hold and one says Sell, per S&P Global Market Intelligence.

Analysts' average target price of $69.82 gives KO implied upside of about 11% in the next 12 months or so. Add in the dividend, and the implied total return hits 14%.

2. Home Depot

• Market value: $290.9 billion
• Dividend yield: 2.7%
• Analysts' consensus recommendation: 1.82 (Buy)

Home Depot (HD, $283.00) has long been a way to play the housing market and discretionary consumer spending in general. With the former in a slump and fears mounting over the health of the latter, it's easy to understand why shares are off by almost a third in 2022.

Analysts see the drawdown as overdone, however, and say it affords investors a chance to buy a quality name at a great price. Indeed, the Street gives HD a consensus recommendation of Buy, with high conviction. Of the 33 analysts issuing opinions on shares, 16 call them a Strong Buy, seven say Buy and 10 have them at Hold.

Their average target price of $350.66 gives HD stock implied upside of about 24% in the next year or so. Add in the dividend, and the implied total return is even greater.

"While skeptics could point to HD's traffic decline and high inventory levels, we believe several data points point to the merit of its investment case," writes UBS analyst Michael Lasser (Buy). "While the stock could be volatile near term, we believe it presents a compelling long-term idea."

1. McDonald's

• Market value: $183.3 billion
• Dividend yield: 2.2%
• Analysts' consensus recommendation: 1.74 (Buy)

McDonald's (MCD, $247.90) gets the strongest consensus Buy recommendation of any Dow dividend stock yielding at least 2.0%.

Shares are off more than 7% for the year-to-date, but that still beats the S&P 500 by about 10 percentage points. Analysts not only expect that outperformance to continue, but for MCD to generate positive returns ahead.

The Street's average target price of $276.97 gives MCD implied upside of 12% in the next 12 months or so. Add in the dividend, and the implied total return comes close to 15%.

"We expect MCD's brand turnaround in the U.S. to be successful, setting the stage for a multi-year same-store sales recovery," writes Truist Securities analyst Jake Bartlett (Buy). "Most importantly, we think MCD's momentum appears sustainable, driven by its new value platform, improved food quality, digital order and pay, delivery and remodels."

Bartlett's view is very much in the majority on the Street, which gives the stock a consensus recommendation of Buy, with high conviction. Eighteen analysts rate MCD at Strong Buy, eight say Buy and nine have it at Hold.

How Are the Top Dow Dividend Stocks Holding Up?

Have a look at the chart below, and you'll see that a cap-weighted index of the current five top-rated Dow dividend payers has generated a negative total return for the year-to-date so far. That said, it's still beating the broader market's total return by a wide margin.

If our new index performs as well as our original one has, this mini-portfolio of blue-chip dividend stocks should bolster investors' portfolios in the second half of 2022 and beyond.

The start of the new year means a fresh chance for yield-seeking investors to get in on one of the easiest market strategies in the book:

The Dogs of the Dow.

Investment manager Michael B. O'Higgins popularized the idea in his 1991 book Beating the Dow. And it doesn't get much simpler: At the beginning of the year, buy the 10 highest-yielding Dow Jones Industrial Average components in equal amounts. Hold them until the end of the year. Rinse. Repeat.

While the Dogs of the Dow sounds like a dividend strategy, it has its roots in value. O'Higgins' proposed that firms with high dividends relative to their stock price in the index would be near the bottom of their business cycle and represent bargains compared to components with lower dividend yields.

And why the DJIA? The Dow Jones has long been considered one of the leading stock-market gauges of America's economy. While the S&P 500 has more components and is more diversified, the Dow still covers most sectors. Not to mention, its components are extremely liquid and there are reams of research available on all 30.

But buyer beware. While the Dogs of the Dow have posted a respectable 8.7% annual total return since 2000, the Dogs have trailed the DJIA in each of the past four years. Analysts have proposed that the shift to growth investing has hurt the strategy's performance; but with value stocks predicted to regain their mojo, the Dogs could again have their day.

Without further ado, here are the 2022 Dogs of the Dow.

Data is as of Dec. 31, 2021, the date on which the Dogs of the Dow are identified. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price. Stocks listed in reverse order of yield.

• Sector: Technology
• Market value: $209.5 billion
• Dividend yield: 2.7%

Oh, how the tables have turned.

A decade ago, Intel (INTC, $51.50) was the leading name in chips, while Advanced Micro Devices (AMD) and Nvidia (NVDA) were promising yet still relatively minor players – combined, the two were worth less than a tenth of Intel by market capitalization.

But Nvidia is now several times Nvidia's size, and AMD isn't too far behind Intel's $210 billion market value. That's because in recent years, Intel has missed the boat on a variety of fronts. From mobile computing and productions capabilities for faster/smaller chipsets, Intel has stumbled … and its rivals have eaten its lunch.

But while Intel might be down, it's hardly not out.

Intel's Alder Lake 12th-generation core processor chips have started to eat away from AMD's high-end processors, and Intel recently announced the latest line of Alder Lake chips that include what the company says is "the fastest mobile processor. Ever." The next two years should see its 13th-gen (Raptor Lake) and 14th-gen (Meteor Lake) chips come live.

Intel also could squeeze some value out of Mobileye, the autonomous vehicle-chip stock that it acquired back in 2017. INTC in December announced its intent to spin the company off in an initial public offering (IPO) while maintaining controlling interest – allowing Intel to enjoy both an immediate windfall while still realizing gains as Mobileye grows.

In keeping with the Dogs of the Dow's value bent, Intel trades at just 14 times the coming year's earnings estimates, significantly less than both the S&P 500 (21) and technology sector (28). INTC's 2.7% yield is also much better than what you typically get out of tech shares.

• Sector: Consumer staples
• Market value: $255.8 billion
• Dividend yield: 2.8%

In today's low-carb and keto-friendly world, sugary soft drinks and sodas are practically verboten. And in recent years, that has largely muted the returns of giant Coca-Cola (KO, $59.21), which has produced roughly half the total returns (price plus dividends) of the S&P 500 over the past half-decade.

But KO is doing a better job of ensuring it has the goods to shift with consumer tastes.

Coca-Cola has spent a few years moving its portfolio into healthier options. That includes teas, milk and sparkling water, among others. It also unveiled new zero-sugar versions of soda brands such as Sprite and Coca-Cola, which fueled about 25% of the Coca-Cola brand's growth in the third quarter.

KO is also looking toward athletics and fitness fanatics for growth. Back in November, Coca-Cola purchased sports beverage group BodyArmor – which it already had a 15% stake in – for $5.6 billion. This instantly gives it a meaningful presence in the industry. "BodyArmor is currently the #2 sports drink in the category in measured retail channels, growing at about 50% to drive more than $1.4 billion in retail sales," the company says.

And you don't get more dependable than Coca-Cola's dividend, which has been growing uninterrupted for 59 consecutive years. That easily puts it among the longest-tenured Dividend Aristocrats.

• Sector: Industrials
• Market value: 102.4 billion
• Dividend yield: 3.3%

Unlike most of Wall Street, 3M (MMM, $177.63) was already getting crushed by the time the COVID bear market came around. The U.S.-China trade war and other difficulties were already weighing on the industrial name when COVID cramped demand for many of the company's products (except its N95 masks and filtering division, of course).

But 2022 could be another year of recovery for 3M.

3M makes more than 60,000 products, from consumer products such as sponges and packing tape to industrial diamond-coated grinding disks and orthodontic supplies. In normal times, this wide product portfolio provides insulation from specific shocks to its various businesses. And it allows 3M to enjoy in numerous facets of a broad economic recovery.

The company grew third-quarter revenues 7.1% year-over-year and generated more than $1.5 billion in free cash flow. 3M is benefiting from continued cost cutting and development programs, as well as from selling chronically underperforming business lines.

3M's forward P/E of 16 makes it one of the more expensive 2022 Dogs of the Dow, and yet it still trades for much cheaper than the S&P 500 and industrial sector (20) alike.

• Sector: Healthcare
• Market value: $126.7 billion
• Dividend yield: 3.5%

Patent expirations are a hurdle most pharmaceutical and biotechnology companies have to face, and that's no different for established biotech Amgen (AMGN, $224.97). Top drugs such as Enbrel, Neulasta and Otezla will fall off the patent cliff in coming years.

The good news? The earliest drug in that cohort to fall off patent won't do so until 2025. And often, U.S. drug manufacturers can kick the can down the road by making minor changes to drugs or adding more indications for the therapy. Not to mention, expirations go both ways – AbbVie's (ABBV) blockbuster drug Humira is set to lose patent protection in the U.S. in 2023, and Amgen has already gained approval to sell Amjevita, a biosimilar form of the drug.

Another big reason AMGN shareholders shouldn't panic is its potential-packed pipeline. The biotechnology firm has more than 20 drugs in Phase 2 or 3 trials. And recently, the FDA approved Amgen severe-asthma medication Tezspire, a potential blockbuster drug.

Nearer-term, another reason to like Amgen is its dividend. Namely, it'll be 10% bigger in 2022, at $1.94 per share quarterly, the company announced in December.

• Sector: Healthcare
• Market value: $193.6 billion
• Dividend yield: 3.6%

Merck (MRK, $76.64) has been doing a lot of evolving in recent years. It has gone on an impressive pipeline-buying spree, which continued in late November with its $11.5 billion buy of Acceleron. And Merck also recently spun off its legacy generic drug and off-patent medicines into a separate company, Organon (OGN).

The resulting Merck is one of the top growth-oriented drug producers in the world.

Sales of oncology blockbuster drug Keytruda jumped 22% year-over-year during Q3, to $4.5 billion. Some analysts believe Keytruda will soon be the world's best-selling drug, overtaking AbbVie's Humira. That's in part because Merck intends to seek approval for other indications of the drug. But Merck has other major drugs in the tank, including Gardasil, whose sales grew 68% to $2 billion in Q3. And its pipeline includes dozens of products in Phase 2 and 3 trials.

A low forward P/E of around 10, and a yield well above 3%, make MRK a model example of the income and value found in the Dogs of the Dow.

• Sector: Consumer staples
• Market value: $45.2 billion
• Dividend yield: 3.7%

Walgreens Boots Alliance (WBA, $52.16) wasn't the COVID winner you might have thought. COVID prompted a shift in the company's sales mix to lower-margin items, and it dragged heavily on foot traffic in the company's Boots U.K. stores.

So, like many other retailers, an escape from the pandemic should help Walgreens, which used COVID as an opportunity to cut nearly $2 billion in costs from its operations.

Partnerships will be essential too. For instance, Walgreens has been opening branded primary-care clinics with VillageMD, who staffs these locations with physicians, allowing them to cater to more than ear infections and sniffles. Walgreens plans to open 1,000 of these clinics at its stores by 2027.

Also in play is the potential divestiture of its Boots business; several reports in December said Walgreens was mulling the move.

With foot traffic on the rebound and new avenues for growth opening up, WBA could be a productive Dow Dog. A forward P/E of around 10 doesn't hurt, either.

• Sector: Energy
• Market value: $226.2 billion
• Dividend yield: 4.6%

COVID was downright miserable for the energy sector – even integrated oil-and-gas giants such as Chevron (CVX, $117.35).

However, while numerous companies closed, and many more were forced to cut jobs, slash capital expenditures and pull back on their dividends, Chevron managed to keep its dividend running and even used an all-stock deal to acquire Noble Energy.

Chevron's acquisition of Noble at fire-sale prices boosted its overall presence in low-cost fields in the Permian Basin, allowing the company to better leverage a rebound in energy prices, which came in spades in 2021.

Energy stocks of all sorts went bananas in 2021, making it the S&P 500's top sector. Chevron returned 46% amid a complete rebound in its operations. For instance, its third quarter saw Chevron earn $6.1 billion versus the $207 million it lost in the year-ago quarter.

However, despite its massive 2021 move, CVX stock yet again finds itself among the Dogs of the Dow.

Chevron's 4.6% current yield isn't as generous as the 6% or so it offered at this same time last year, but it's still one of the top yields in the Dow. Meanwhile, it's value-priced at just 12 times earnings estimates.

• Sector: Technology
• Market value: $119.9 billion
• Dividend yield: 4.9%

International Business Machines (IBM, $133.66) has been nothing short of a disappointment in recent years.

Big Blue has struggled to remain relevant in the age of cloud computing while rivals chipped away market share. At one point, the firm recorded 22 consecutive quarters of declining revenue, then restarted that streak shortly after breaking it. Even including dividends, IBM shares returned just 1% between 2017 and 2021.

But IBM might finally be getting itself together.

Its 2019 purchases of open-source software firm Red Hat boosted the company's operations. Fast-forward to 2021, and the company cut loose some dead weight, spinning off its legacy IT infrastructure services as Kyndryl (KD).

A now leaner, meaner IBM is focused once again on growth.

We saw signs of this in the company's third quarter, where overall cloud revenues grew 14% year-over-year. It'll still be a while before IBM can report its post-separation numbers, but analysts are generally expecting IBM to start heading in the right direction once again.

Better still: IBM didn't give away any of the dividend game with Kyndryl. International Business Machines remains a Dividend Aristocrat whose 4.9% yield is among the best of 2022's Dogs of the Dow.

• Sector: Communication services
• Market value: $215.1 billion
• Dividend yield: 4.9%

Verizon (VZ, $51.96) spent the last few years trying to build out a communications and media empire. Wireless communication has become a commodity; there isn’t much difference between carriers, plans or offerings at this point. The U.S. market is saturated. The major carriers can’t rely on their legacy businesses for growth.

But Verizon’s ventures, which included buying Yahoo! And other media properties, simply didn’t pan out. Several write-offs later, and VZ is just getting back to basics: improving its giant network and providing services that utilize said network.

The 5G transformation is a major tailwind for Verizon. It’s not just consumer devices; smart vehicles, the Internet of Things and other applications will be a big driver for its network. Also, Verizon has started to transition toward more enterprise customers, which includes fleet management software and applications to data security. These should also provide a runway for growth.

A forward P/E under 10 and a nearly 5% dividend, meanwhile, provide some of the best features of the Dogs of the Dow.

• Sector: Materials
• Market value: $42.0 billion
• Dividend yield: 4.9%

Dow has had a wild and transformative few years that saw it spin off assets before merging with rival DuPont (DD), then the chemical giant split into three separate firms. The remaining Dow contains the materials sciences chemicals, including adhesives, polyurethanes, silicones, resins and waxes, among others.

Like most other materials stocks, Dow struggled right alongside the broader economy during the COVID recession. For instance, during Q3 2020, the company lost 4 cents per share on $9.7 billion in sales. By Q3 2021, Dow had recovered considerably, posting $2.23 per share in earnings on $14.8 billion in revenues.

The omicron and future variants could throw more hurdles at the Dow recovery, but in general, a growing global economy should mean continued growth in demand for Dow's products.

You can buy into that recovery on the cheap through Dow. Shares trade at a svelte nine times future earnings and yield nearly 5% at today's prices. That's roughly four times the income you'll pull from the broader market, and at a much better valuation. A fair dividend payout ratio of 45% of earnings leaves Dow ample room to raise that payout further.

Aaron Levitt was long AMGN and MRK as of this writing.

The Dow Jones Industrial Average shook off COVID-19, supply-chain snafus, inflationary pressures and myriad other worries to deliver an outstanding year in absolute terms. Indeed, the blue-chip bastion of Dow stocks generated a price gain of 19% through Dec. 30.

To get a sense of what an outlier 2021 was for the blue-chip average, the Dow's 30-year annualized price return comes to 8.7%.

Although the Dow as a whole powered through the pandemic, there's no question COVID-19 factored heavily in deciding the average's winners and losers in 2021, which we list in full down below. Naturally, the pandemic remains a key variable in the minds of Wall Street analysts as they rate the 30 Dow Jones stocks' prospects for 2022.

Either way, many of this year's best Dow stocks are expected to continue their market-beating ways in the new year.

Take Home Depot (HD, $409.94) and Microsoft (MSFT, $339.32), for example. The Dow's top stocks of 2021 – each up by more than half – are forecast to put up more big gains in the year ahead thanks to a continuation of current trends.

In HD's case, the pandemic led to changes in consumer consumption patterns. Folks stuck at home decided to feather their nests, embrace do-it-yourself (DIY) projects and invest newfound discretionary income into their dwellings. The red-hot housing market also remains a tailwind at HD's back.

MSFT, meanwhile, has become a king of cloud-based services. The rise of remote work accelerated companies' embrace of Microsoft products such as Azure and Office 365. Looking ahead, analysts say enterprise customers are still in the early innings of their digital transformations.

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On the other side of the ledger, analysts say some of this year's losers are set to become 2022's winners. Look no farther than Walt Disney (DIS, $155.93) for an example.

Disney was the Dow's worst stock in 2021, losing almost 14%. The media and entertainment conglomerate was essentially undone by the emergence of the Delta and Omicron variants of COVID-19. Anything that creates uncertainty around the health of Disney's all-important theme parks and resorts – not to mention its filmed entertainment business – is bad for DIS shareholders.

As much of a bummer as 2021 was for DIS, the Street gives shares a consensus recommendation of Buy, with fairly high conviction to boot. The pandemic can't last forever, the thinking goes, and shares look cheap.

Here's hoping, anyway.

Without further ado, have a look at how all 30 Dow stocks fared in 2021 in the table below:

Hedge funds as a group have a poor long-term track record, but there's still something irresistible about knowing what the putative smart money has been up to.

Besides, you've got to give them credit where credit is due. Hedge funds as a group might not be generating positive returns in 2022, but hey, at least they're beating the broader market.

Hedging strategies by definition limit upside when stocks are rising, which helps explain the industry's years of underperformance during the bull market. By the same token, however, hedging strategies limit downside when everything is selling off. And goodness knows investors have seen plenty of red on their screens so far this year.

Case in point: the Eurekahedge Hedge Fund Index delivered a total return (price appreciation plus dividends) of -1.6% year-to-date through Jan. 31. That compares with the S&P 500's total return of -5.2% over the same span.

We won't know how hedge funds have adapted to current market turmoil until the next batch of regulatory filings come out in May, but we do know how they were positioned heading into 2022.

Surprise, surprise: Hedge funds were heavily invested in most of the market's biggest and bluest of blue-chip stocks.

Indeed, components of the Dow Jones Industrial Average are heavily over-represented when it comes to hedge funds' favorite stock picks. Fully 13 of the Dow's 30 names rank among the stocks most widely held by hedge funds.

That's partly a function of Dow stocks' massive market capitalizations and attendant liquidity, which creates ample room for institutional investors to build or sell large positions. Big-name blue-chip stocks also carry a lower level of reputational risk for professional money managers. (It's a lot easier to justify holding a large position in a Dow stock than a no-name small-cap if restive clients start grumbling about their returns.)

Be that as it may, almost half these names are not in the famed blue-chip average, and a few of these picks might surprise you. Either way, each hedge-fund favorite is worth a closer look.

Have a look at hedge funds' 25 top blue-chip stocks to buy now. All these names likely appeal to elite funds because of their size, strong track records or outsized growth prospects. But we'll delve into a few specifics that make each blue chip special.

Share prices and related data are as of Feb. 27, unless otherwise noted. Companies are listed in reverse order of popularity with hedge funds, according to data from WhaleWisdom. Analysts' ratings and other data are provided S&P Global Market Intelligence, Morningstar, Refinitiv Stock Reports Plus and YCharts, unless otherwise noted.

• Market value: $232.8 billion
• Dividend yield: 2.7%
• Analysts' consensus recommendation: 2.17 (Buy)

Cisco Systems (CSCO, $56.04) became slightly less popular with hedge funds in the fourth quarter, but the technology conglomerate still managed to crack the smart money's top 25 most widely held stocks.

Close to 22% of all hedge funds own shares in the networking, cloud and cybersecurity giant, and 1.5% of all hedge funds count CSCO as a top 10 holding, per WhaleWisdom. However, hedge funds' collective net ownership fell by more than 26 million shares from Q3 to Q4. Furthermore, the number of funds closing out their positions in CSCO rose almost 23%, while new positions ticked up just 3.3%.

The end result is that this component of the Dow Jones Industrial Average dropped to No. 25 on our list from No. 22 three months ago.

Perhaps hedge funds were looking to take some profits off their winning bets? CSCO stock added 16.4% in the fourth quarter vs. the S&P 500's gain of 10.7%.

The new year hasn't been as kind to CSCO stock, which is lagging the broader market by a wide margin YTD. Wall Street nevertheless remains bullish, giving shares a consensus recommendation of Buy, albeit with moderate conviction. Of the 29 analysts issuing opinions on CSCO tracked by S&P Global Market Intelligence, nine rate it at Strong Buy, six call it a Buy and 14 have it at Hold.

• Market value: $194.3 billion
• Dividend yield: 3.1%
• Analysts' consensus recommendation: 2.78 (Hold)

Despite years of troubling operating performance and disappointing returns, Intel (INTC, $47.71) is a staple on the list of hedge funds' favorite stocks.

True, the company has been losing market share to competitors. But Intel's central processing units (CPUs) are still found in 84% of desktop PCs and 78% of laptops. INTC furthermore commands roughly 90% of the market for servers, which are in high demand amid the shift to cloud-based computing.

Then there's the Dow stock's massive market cap and attendant liquidity, which allows large investors to buy and sell positions with relative ease.

As such, hedge funds looking for broad tech-sector exposure can hardly avoid the world's biggest chipmaker.

More than a fifth of all hedge funds own INTC stock, essentially in line with Q3 figures. The number of funds initiating positions increased to 36 in Q4 from 21 in the previous quarter, while the number of hedge funds closing positions fell to 24 from 44.

Wall Street is clearly more cautious than the hedge fund crowd, however. Analysts' consensus recommendation for INTC stock stands at Hold – and it's a bearish Hold, to boot. Sell ratings are rare on the Street, and yet of the 41 analysts issuing opinions on INTC, five call it a Sell and two have it at Strong Sell. The remaining ratings break down to seven Strong Buys, four Buys and 23 Hold calls.

• Market value: $215.9 billion
• Dividend yield: 1.5%
• Analysts' consensus recommendation: 1.80 (Buy)

Abbott Laboratories (ABT, $122.41) leaped into the top 25 most popular hedge fund blue chips in Q4, perhaps in anticipation of the broader market's shift toward favoring value names in 2022.

ABT manufactures a wide variety of healthcare goods. Its portfolio includes branded generic drugs, medical devices, nutrition and diagnostic products. Some of its best-known products include Similac infant formulas, Glucerna diabetes management products and i-Stat diagnostics devices.

About 22% of all hedge funds, or 396 in total, have a position in the stock. And although just 0.8% of them counted ABT as a top 10 holding in Q4, that's an increase of two funds vs. the previous quarter. Moreover, the number of hedge funds initiating positions in ABT increased by 26% from Q3 to Q4.

Hedge funds are likely attracted to Abbott Labs’ commitment to returning cash to shareholders. After all, the company has increased its dividend annually for 50 years. Indeed, ABT is a member of the S&P 500 Dividend Aristocrats, an index of 66 best dividend stocks that have raised their payouts for at least 25 consecutive years.

The Street is perhaps even more bullish on Abbott Labs than the hedge fund crowd, giving it a consensus recommendation of Buy, with fairly high conviction. Ten analysis rate ABT at Strong Buy, six say Buy, two call it a Hold and two have it at Sell.

• Market value: $205.0 billion
• Dividend yield: N/A
• Analysts' consensus recommendation: 1.49 (Strong Buy)

Salesforce.com (CRM, $208.09) was added to the Dow in 2020 when Exxon Mobil (XOM) was defenestrated from the blue-chip barometer. Being tapped for membership in the elite average made the software-as-a-service juggernaut more popular than ever with hedge funds.

But at least some of that interest waned in the most recent quarter.

Hedge funds sold a net of more than 6 million shares in CRM during the three months ended Dec. 31. Although 22% of all hedge funds still owned shares in CRM as of Q4, that was down from 24% in Q3. Meanwhile, the number of hedge funds counting the stock as a top 10 holding declined by nearly a third, to 49 funds from 71 funds in the previous quarter.

Salesforce.com's stock lost 6.3% in the final quarter of 2021 – and plunged more than 15% over the course of two sessions at one point in Q4 – hurt by a disappointing profit forecast and increased competition from cloud rivals Microsoft (MSFT), Amazon.com (AMZN) and Google parent Alphabet (GOOGL).

The Street nevertheless remains resolutely bullish on CRM stock.

Thirty-two analysts rate CRM at Strong Buy, 10 call it a Buy and seven have it at Hold, per S&P Global Market Intelligence. That works out to a consensus recommendation of Strong Buy.

Salesforce, which provides customer relationship management software to enterprise customers, was essentially providing cloud-based services before they were cool. That early mover advantage informs at least part of the bull case on shares.

• Market value: $329.5 billion
• Dividend yield: 4.5%
• Analysts' consensus recommendation: 2.54 (Hold)

Hedge funds added a net of nearly 19 million shares in Exxon Mobil (XOM, $77.84) in the fourth quarter. New and increased positions rose substantially, while reduced and closed positions fell apace.

The energy supermajor's stock price has nearly doubled since it was removed from the Dow Jones Industrial Average at the end of August 2020. More recently, XOM is up 43% over the past year, thanks to the relentless rise in crude oil prices.

As the largest listed energy company by market capitalization, Exxon Mobil is an obvious holding for hedge funds looking to bet on the sector – especially when the energy sector as a whole is producing such outsized returns.

And, like all the blue-chip stocks on this list, XOM's massive market value and liquidity makes it a frictionless fit for institutional investors buying and selling large positions.

Happily, investors of all sizes can count on XOM for equity income. Exxon Mobil is a member of the S&P 500 Dividend Aristocrats, having increased its dividend for 39 straight years – and at an average annual growth rate of 6.0% to boot.

Incidentally, XOM's long history of generous dividend growth helped it become one of the 30 best stocks of the past 30 years.

Wall Street isn't generally keen on XOM at current levels, however, giving it a consensus recommendation of Hold. Of the 28 analysts issuing opinions on shares, five rate them at Strong Buy, four say Buy, 18 have them at Hold and one calls them a Sell.

• Market value: $363.3 billion
• Dividend yield: 1.9%
• Analysts' consensus recommendation: 2.15 (Buy)

Bank of America (BAC, $45.02) is a natural fit for hedge funds making bets in the financial sector. After all, it's a sprawling, international money-center bank with a massive market cap and abundant liquidity.

It also doesn't hurt that BAC is one of Warren Buffett's favorite stocks. Berkshire Hathaway (BRK.B), the holding company of which Buffett is chairman and CEO, owns more than 1 billion shares. The stake accounts for 13.6% of Berkshire's equity portfolio, or its second-largest holding after Apple (AAPL).

Nearly 23% of hedge funds, or 416 in total, own shares in the nation's second-largest bank by assets. That's up from 396 funds in Q3. The number of hedge funds opening new positions more than doubled vs. the previous quarter, but then the number of funds closing their positions increased by nearly half.

Ultimately, hedge funds sold a net of 40.6 million shares in BAC in Q4.

BAC stock trailed the broader market by roughly 6 percentage points in the final three months of 2021. It's fair to assume that selling pressure on the part of hedge funds didn't help.

But the Street remains mostly bullish on the blue-chip bank stock, giving it a consensus recommendation of Buy, with moderate conviction. Of the 26 analysts issuing opinions on BAC tracked by S&P Global Market Intelligence, 10 rate it at Strong Buy, six say Buy, eight have it at Hold and two call it a Strong Sell.

• Market value: $379.3 billion
• Dividend yield: 2.2%
• Analysts' consensus recommendation: 2.22 (Buy)

Procter & Gamble (PG, $158.24) is sort of a must-have stock for large pools of capital looking for exposure to the consumer staples sector.

Not only is this Dow component the largest stock in its sector by market cap, but it's a classic defensive blue-chip name that historically trades with exceptionally low volatility relative to the broader market.

That's partly due to the fact that demand for products such as Charmin toilet paper, Crest toothpaste, Tide laundry detergent and Pampers diapers tends to remain stable in both good times and bad.

PG also happens to be a dividend-growth machine. This member of the S&P 500 Dividend Aristocrats has raised its payout annually for 65 years in a row.

That said, hedge funds collectively sold a net of more than 6 million shares in PG in the fourth quarter. The number of hedge funds with stakes in the company declined as well, albeit by about 1% to 417 from 422 in Q3.

On the other hand, P&G's biggest hedge fund fans appear to have grown more confident in their bullish convictions. The number of hedge funds counting PG as a top 10 holding jumped by more than half, to 32 in Q4 from 21 in Q3.

Either way, PG stock rose 17% in the fourth quarter to beat the S&P 500 by more than 6 percentage points, and the Street sees more outperformance ahead. Analysts' consensus recommendation stands at Buy, consisting of eight Strong Buy calls, four Buys, 10 Holds and one Strong Sell.

• Market value: $192.8 billion
• Dividend yield: 3.6%
• Analysts' consensus recommendation: 2.04 (Buy)

Yet another Dow component, pharma giant Merck (MRK, $76.32) has the size and blue-chip prestige to be an obvious healthcare sector pick for any large institutional investor.

One overhang on Merck’s stock has been the company's reliance on blockbuster cancer drug Keytruda, which will lose patent exclusivity in 2028. But bulls contend Keytruda's future is more than baked into MRK’s share price. They further argue that the market insufficiently values recent and potential acquisitions, and Merck’s drug pipeline, which includes a new coronavirus treatment.

Although Keytruda is indeed "a key growth driver," Argus Research analyst David Toung (Buy) notes that Merck's "COVID-19 antiviral Molnupirarvir will make a substantial contribution in 2022." The analyst also applauds Merck's $11.5 billion acquisition last year of Acceleron Pharma, which strengthens the firm's cardiovascular portfolio. And MRK will likely strike additional pipeline-boosting deals, adds Toung.

The number of hedge funds holding a stake in MRK was unchanged at 421 in Q4. Although hedge funds sold a net of 2.5 million shares, the number of hedge funds initiating positions in MRK increased by more than 65%. Closed positions ticked up by two funds, or 7.7%, from Q3 to Q4, while the number of funds reducing their holdings declined by a little more than 9%.

Of the 24 analysts issuing opinions on MRK, nine rate it at Strong Buy, five say Buy and 10 have it at Hold. That works out to a consensus recommendation of Buy.

• Market value: $264.5 billion
• Dividend yield: 3.8%
• Analysts' consensus recommendation: 1.75 (Buy)

Hedge funds upped their collective interest in AbbVie (ABBV, $149.54) in the fourth quarter, purchasing a net of 9.4 million shares.

ABBV is best known for blockbuster treatments such as Humira, a rheumatoid arthritis drug on pace to surpass Lipitor as the best-selling drug of all time. Hedge funds, however, appear increasingly attracted to the pharma company as a value play. AbbVie's pipeline of drugs under development – and its 50-year streak of dividend increases – only add to its appeal.

More than 23% of all hedge funds, or 428, owned shares in ABBV in the most recent quarter, up from 422 funds in Q3. The number of hedge funds reporting ABBV as a top 10 holding, meanwhile, jumped by more than half.

Furthermore, the number of hedge funds initiating a stake in ABBV increased by almost 59%. Funds boosting their stakes rose too. And the number of hedge funds closing or reducing their positions both declined.

In addition to Humira, AbbVie is known for cancer drug Imbruvica and testosterone replacement therapy AndroGel. But bulls say the real future upside in ABBV stock hinges on cancer-fighting and immunology drugs – not to mention the products acquired from Botox-maker Allergan in a $63 billion deal that closed in 2020.

Thirteen analysts rate the stock at Strong Buy, five say Buy, five call ABBV a Hold and one has it at Sell. That works out to a consensus recommendation of Buy.

On a bearish note, Warren Buffett's Berkshire Hathaway has cut its ABBV stake for four consecutive quarters, most recently by 78%.

• Market value: $330.7 billion
• Dividend yield: 2.4%
• Analysts' consensus recommendation: 1.79 (Buy)

Dow component Home Depot (HD, $316.65) has long been one of the most popular blue-chip stocks among hedge funds and other investors trying to gain exposure to housing stocks specifically, but also consumer spending in general.

Indeed, more than 23% of all hedge funds held a stake in HD in the fourth quarter. That represents only a small increase over the previous quarter, yet the number of hedge funds counting HD as a top 10 position jumped nearly 77% – to 53 from 30 – from Q3 to Q4.

Moreover, the number of hedge funds initiating new positions more than doubled quarter-to-quarter, while the number of hedge funds closing their positions fell by more than a third. All in all, hedge funds added a net 386,000 shares in Home Depot.

Although the pandemic brought boom times to the nation's largest home improvement retail chain – which has now created difficult year-over-year comparisons – the Street says HD's long-term outlook remains robust.

The Street gives HD a consensus recommendation of Buy, with high conviction. Of the 33 analysts covering the stock tracked by S&P Global Market Intelligence, 17 rate it at Strong Buy, seven say Buy, eight call it a Hold and one has it at Strong Sell.

Lastly, although past performance is no guarantee of future returns, it's still worth noting HD's status as one of the 30 best stocks of the past 30 years.

• Market value: $447.6 billion
• Dividend yield: 1.2%
• Analysts' consensus recommendation: 1.63 (Buy)

Institutional investors looking to make big bets in the healthcare sector can't avoid the gravitational pull of Dow component UnitedHealth Group (UNH, $475.75). With a market value of nearly $450 billion and a 2022 revenue estimate of more than $319 billion, this blue-chip stock is the largest publicly traded health insurer by a wide margin.

Hedge funds as a group reduced their exposure to UNH in Q4 by 4.1 million shares, but 24% of them still have stakes in the company. Indeed, the number of hedge funds with UNH as a top 10 holding increased by 50% to 69, while those starting new positions more than doubled.

True, the number of hedge funds reducing their exposure to UNH increased by nearly a fifth in Q4. But those exiting their positions entirely declined by almost 9%.

Big investors and analysts alike praise UNH on any number of fronts, from its health benefits businesses to its consulting and analytics services.

"We remain impressed by the year-to-year consistency UNH shows as it continues to exceed expectations by navigating the industry's many pitfalls," writes Oppenheimer analyst Michael Wiederhorn, who rates shares at Outperform (the equivalent of Buy). "We continue to believe UNH remains the bellwether in the healthcare services space."

Oppenheimer has plenty of company on the Street, which gives UNH a consensus recommendation of Buy, with high conviction. Fourteen analysts call it a Strong Buy, six say Buy, three have it at Hold and one rates it at Sell.

• Market value: $129.3 billion
• Dividend yield: N/A
• Analysts' consensus recommendation: 1.70 (Buy)

It's safe to assume that some of that smart money isn't feeling so bright about PayPal Holdings (PYPL, $110.94) right now.

The number of hedge funds initiating positions in PayPal vaulted 87% in Q4. Collectively, hedge funds purchased a net of 2.9 million shares in the digital payments company in the final quarter of the year.

Those positions have been punished. PYPL stock lost about 60% of its value from the beginning of Q4 2021 through Feb. 22, 2022. Quarterly earnings that missed Wall Street's consensus estimate, a shortfall in user growth, and scaled-back revenue and profit forecasts were to blame.

Not all hedge funds suffered from such bad timing, as 156 cut their stakes in PYPL in Q4, while 53 closed out their positions entirely. Additionally, the number of hedge funds counting PYPL as a top 10 holding fell by almost half, to 38 from 71 in the prior quarter.

The Street is somewhat less bullish on PayPal today than it was a month ago, but its collective optimism remains high. Twenty-six analysts call it a Strong Buy, 11 say Buy, nine have it at Hold and one rates it at Strong Sell, per S&P Global Market Intelligence. That works out to a consensus recommendation of Buy.

But even bulls say it could be awhile before PayPal returns to the market's good graces.

"It will likely take several quarters of better results to restore investor confidence," writes Argus Research analyst Stephen Biggar, who lowered his 2022 profit estimate and price target but maintained a Buy rating on shares.

• Market value: $267.9 billion
• Dividend yield: 3.4%
• Analysts' consensus recommendation: 2.26 (Buy)

Pharmaceutical giant ​Pfizer (PFE, $47.72) was removed from the Dow in 2020, but it remains one of the go-to blue-chip stocks for large institutional investors. After all, it's a classic defensive dividend stock with ample liquidity and a huge market value that gives it outsized influence on the healthcare sector.

And hedge funds did indeed embrace PFE in a big way in Q4, adding a net of 9.1 million shares. The number of hedge funds holding a stake in the pharma company rose to 451 from 439 in Q3, and those counting it among their top 10 positions more than doubled, to 46 in Q4 from 19 in Q3. Moreover, the number of hedge funds initiating stakes rose by more than half, to 61 from 40 in the previous three-month period.

The bottom line is that nearly a quarter of all hedge funds own shares in Pfizer.

The Street is bullish on the name as well, giving PFE a consensus recommendation of Buy – albeit with middling conviction. Eight analysts call it a Strong Buy, one says Buy and 14 have it at Hold.

If nothing else, it's certainly easier to make a bull case based on valuation these days. After all, PFE is off more than 19% for the year-to-date. The drawdown has shares trading at just 6.8 times the Street's 2022 earnings per share (EPS) estimate.

But we'll have to wait until May's 13F filing deadline to see whether hedge funds went bargain hunting in PFE during Q1.

• Market value: $360.8 billion
• Dividend yield: 0.5%
• Analysts' consensus recommendation: 1.51 (Buy)

It seems like everyone loves Mastercard (MA, $369.09).

The global payments processor is a favorite of hedge funds and analysts, and no less an eminence than Warren Buffett is a bull too. True, Berkshire Hathaway pared its stake by 7% in the third quarter, but the holding company still owns almost 4 million shares in Mastercard – a position initiated by lieutenant portfolio managers Todd Combs and Ted Weschler. (Buffett has said he wishes he himself had pulled the trigger, and earlier at that.)

Hedge funds, meanwhile, added a net of 1.9 million shares in Q4. Although 25% of all hedge funds have Mastercard in their portfolios, that's down from almost 28% in Q3. And while 3.5% of all hedge funds count MA as a top-10 position, that's off from 3.9% in the previous three-month period.

More bullishly, the number of hedge funds initiating stakes in MA rose almost 24% to 47 in Q4, while the number of funds reducing their holdings fell by 16% to 151. On the other side of the ledger, the number of hedge funds closing their positions rose by more than half, to 64 in Q4 from 41 during the third quarter.

Hedge funds and other Mastercard believers are high on the name thanks to both company-specific strengths and the relentless global adoption of digital transactions.

The Street gives Mastercard stock a consensus recommendation a hair's width short of Strong Buy. Of the 37 analysts issuing opinions on MA, 22 rate it at Strong Buy, 11 say Buy and four have it at Hold.

• Market value: $603.9 billion
• Dividend yield: 0.07%
• Analysts' consensus recommendation: 1.62 (Buy)

Nvidia (NVDA, $241.57) is one of the 30 best stocks of the past 30 years, but you wouldn't know it from recent share performance. NVDA added 42% during the fourth quarter of 2021 alone – only to shed roughly 18% through the first two months of 2022.

The long-term allure of NVDA is easy to understand. Few tech stocks offer so much exposure to so many emerging technologies and applications. NVDA's high-powered graphics processing units (GPUs) drive everything from PCs and video game consoles to artificial intelligence (AI), data servers, supercomputers, mobile chips and even cryptocurrency mining.

Nearly 26% of all hedge funds, or 470, owned shares in Nvidia at the fourth quarter’s end. That's up from 25%, or 435, in the third quarter. Meanwhile, more than 5% of all hedge funds, or 95, had the stock as a top 10 holding, up from 4%, or 70 funds, in Q3. The number of hedge funds starting new positions increased almost 80%, while the number of funds exiting their stakes declined more than 20%.

Be that as it may, the market is punishing pricey growth stocks like Nvidia indiscriminately these days. We'll have to wait until May to see if hedge funds pounced on shares at ever-cheaper prices – or capitulated to NVDA's bear market.

The Street, for its part, remains a big believer in the name, giving NVDA a consensus recommendation of Buy. Twenty-six analysts rate shares at Strong Buy, eight say Buy, six have them at Hold and two say Sell.

• Market value: $272.2 billion
• Dividend yield: N/A*
• Analysts' consensus recommendation: 1.83 (Buy)

As a sprawling media and entertainment conglomerate – and component of the Dow Jones Industrial Average – Walt Disney (DIS, $149.53) is a natural way for hedge funds to make big bets on a rebounding sector of the economy.

And investors of all sizes have to be pleased with the way DIS has held up in an otherwise dismal year for stocks. Shares are off 3.5% for the year-to-date, vs. an 8% decline for the S&P 500.

Although hedge funds collectively sold a net of 1.1 million shares in Q4, the number of funds initiating stakes jumped by more than two-thirds, to 52 from 31 in Q3. The number of hedge funds reducing their holdings or closing out their positions entirely also fell markedly.

The number of funds holding shares in Disney rose to 484 in Q4 – or 26.5% of all hedge funds – from 481 in Q3.

Bulls are betting on easy comparisons to pandemic-depressed results in Disney's theme parks and filmed entertainment divisions. They're also encouraged by the long-term promise of the firm's Disney+ streaming service.

The Street gives DIS a consensus recommendation of Buy, with fairly high conviction. Of the 29 analysts issuing opinions on the stock tracked by S&P Global Market Intelligence, 14 rate it at Strong Buy, six say Buy and nine have it at Hold. They forecast the media and entertainment colossus to generate average annual EPS growth of almost 40% over the next three to five years.

* Disney suspended its dividend in May 2020 in response to the COVID-19 crisis.

• Market value: $436.5 billion
• Dividend yield: 2.6%
• Analysts' consensus recommendation: 2.18 (Buy)

Whether we're talking hedge funds, mutual funds or other large piles of equity capital, Johnson & Johnson (JNJ, $166.00) is among the must-have blue-chip stocks for any large-cap healthcare portfolio.

Among the arguments in favor of Johnson & Johnson are its diversification, although that's about to change. The multifaceted firm is set to split off its consumer health business – the one that makes Tylenol, Listerine and Band Aid – from its pharmaceuticals and medical devices divisions. The breakup is meant to free the faster-growth, higher-margin parts of J&J from the drag of its more mature, less profitable operations.

Hedge funds may be forgiven if some of them question the wisdom of the move. After all, JNJ became one of the 10 best stocks of the past 30 years as a three-headed giant.

Analysts remain mostly bullish on the name, giving it a consensus recommendation of Buy, but with mixed conviction. Six analysts rate JNJ at Strong Buy, two call it a Buy and nine say Hold.

Hedge funds were incrementally more bullish on the name in Q4, adding a net of more than 682,000 shares. Nearly 27% of all hedge funds, or 491, had stakes in JNJ as of Q4's end, up from 486 hedge funds in the previous quarter. Forty-two hedge funds initiated positions in the company in Q4, up from 26 in Q3, while the number of hedge funds exiting their stakes dropped to 22 in Q4 from 35 in the prior three-month period.

Many of those funds no doubt appreciate the company's commitment to delivering income to investors. This S&P 500 Dividend Aristocrat has increased its payout annually for 59 years.

• Market value: $713.0 billion
• Dividend yield: N/A
• Analysts' consensus recommendation: 2.50 (Buy)

Berkshire Hathaway's (BRK.B, $319.24) appeal to the hedge fund crowd is obvious. Chairman and CEO Warren Buffett is arguably the greatest long-term investor of all time.

Under the direction of Buffett and partner Charlie Munger, Berkshire Hathaway created $504.1 billion in wealth from January 1990 to December 2020. That works out to an annualized return of nearly 12%, according to Hendrik Bessembinder, a finance professor at the W.P. Carey School of Business at Arizona State University.

The S&P 500 generated an annualized return of just 8% over the same span.

Going back even farther, Argus Research notes that since 1965, Berkshire Hathaway's stock returns more than doubled those of the S&P 500, delivering compound annual growth of 20%, vs.10.2% for the index.

What could make a hedge fund manager's life easier than essentially offloading some of his or her work to Uncle Warren?

True, hedge funds collectively sold a net of 3.5 million shares in Q4 – but more than a few managers probably regret it. BRK.B is up nearly 7% so far in 2002, vs. a decline of roughly 8% for the broader market.

More than 27% of all hedge funds, or 500 in total, owned stakes in BRK.B as of Dec. 31, up from 485 in Q3. Meanwhile, the number of hedge funds initiating positions came to 43 in Q4, up from 16 in the prior period. Lastly, the number of hedge funds closing their positions fell by more than half, to 15 from 32 in the third quarter.

Only three analysts cover Berkshire's B Class shares. But for what it's worth, their consensus recommendation comes to Buy.

• Market value: $436.9 billion
• Dividend yield: 2.7%
• Analysts' consensus recommendation: 2.38 (Buy)

As the nation's largest bank by assets – and a component of the Dow Jones Industrial Average – JPMorgan Chase (JPM, $147.97) exerts an almost irresistible pull on large institutional investors such as hedge funds.

Just have a look at the stats. As of Dec. 31, nearly 28% of all hedge funds, or 507 in total, owned shares in JPM. New positions rose by nearly three-quarters, to 47 hedge funds from 27 hedge funds in Q3. The number of hedge funds increasing their stakes rose 10%, while those reducing or closing their positions fell vs. Q3.

However, hedge funds did sell a net of 2.1 million shares in Q4, and the percentage of hedge funds with JPM as a top 10 holding slipped to 3.7% from more than 5% in the previous three-month period.

The bottom line is that the smart money still very much likes the sprawling money center bank. The Street, for its part, is somewhat less bullish. Although the pros give this blue chip a consensus recommendation of Buy, conviction is highly mixed.

Of the 26 analysts issuing opinions on the financial stock tracked by S&P Global Market Intelligence, seven call it a Strong Buy, six say Buy and 11 have it at Hold. Most intriguing is that two analysts slap Strong Sell ratings on JPM. Sell recommendations are rare on the Street; Strong Sell recommendations are rarer still.

If it's any consolation to current shareholders, the Street's more pessimistic opinions are mostly based on valuation. Jefferies analyst Ken Usdin, for example, downgraded JPM stock to Hold from Buy in mid-February, citing "limited upside given a still-premium multiple," among other factors.

• Market value: $460.0 billion
• Dividend yield: 0.7%
• Analysts' consensus recommendation: 1.51 (Buy)

Few blue-chip stocks get higher marks from analysts, hedge funds and even Warren Buffett than Visa (V, $219.27). That's because the world's largest payments network has unique advantages in a world that's ditching cash in favor of digital transactions.

"We are highly attracted to Visa's powerful brand, vast global acceptance network and strong business model," writes Oppenheimer analyst Dominick Gabriele (Outperform). "The company is well positioned to benefit from the long-term secular shift from paper currency (cash/check) to plastic (electronic payments), consumer spending growth and increased globalization."

Visa's privileged position in the payments revolution helps explain why hedge funds bought a net of 17.1 million shares in the fourth quarter. Nearly 28% of all hedge funds maintain stakes in the firm, and more than 4.1% of all hedge funds have Visa as a top-10 holding.

Although the number of hedge funds closing their Visa bets rose to 52 in Q4 from 41 in the prior quarter, the number of hedge funds initiating stakes rose 150%, to 60 from 24 in Q3.

And, like a number of hedge funds' favorite stocks, Visa happens to be one of the 30 best stocks of the past 30 years.

Analysts' consensus recommendation stands just shy of Strong Buy, with 21 Strong Buy ratings, 10 Buys and four Hold calls. They expect the company to generate average annual EPS growth of 18.6% over the next three to five years, per S&P Global Market Intelligence.

• Market value: $2.69 trillion
• Dividend yield: 0.5%
• Analysts' consensus recommendation: 1.60 (Buy)

It's only natural that hedge funds love Apple (AAPL, $164.85). The Dow component and world's largest publicly traded company isn't just a cornerstone of the tech sector, but of the broader market as well.

It's also by far and away Warren Buffett's favorite stock, comprising nearly 48% of Berkshire Hathaway's stock portfolio.

"I don't think of Apple as a stock," Warren Buffett has said about Apple. "I think of it as our third business."

Hedge funds are equally adoring of Apple. More than 34% of them, or 626, own AAPL, and 19% have it as a top 10 holding. The number of hedge funds initiating stakes in Q4 more than doubled to 59 from 27 in Q3. Funds increasing their holdings ticked up, while the number of hedge funds closing their positions fell to 24 from 45 in the previous quarter.

Buffett and other bulls contend that Apple's ecosystem of products and services – and the fantastic brand loyalty they inspire – set it up for years of market-beating returns. Twenty-seven analysts rate AAPL at Strong Buy, seven say Buy, eight call it a Hold and one rates it at Sell, per S&P Global Market Intelligence.

Hedge funds no doubt also appreciate the way Apple lavishes cash on shareholders. Apple returned more than 100% of its free cash flow to investors in each of the past four fiscal years, primarily through share repurchases. For good measure, Apple also hiked its dividend by 7.3% in 2021.

Lastly, we would be remiss not to mention that Apple stock has been the greatest creator of shareholder wealth in the world over the past 30 years.

• Market value: $572.9 billion
• Dividend yield: N/A
• Analysts' consensus recommendation: 1.66 (Buy)

Facebook parent Meta Platforms (FB, $210.48) remained extremely popular with hedge funds as of Dec. 31, but it's doubtful the social media giant will feature as prominently on this list when we update it in May.

FB stock has plunged 35% since its disastrous fourth-quarter earnings report of early February, wiping out in excess of $300 billion in market cap. It's safe to assume that more than a few hedge funds participated in the selling.

Changes to Apple's iOS privacy settings are clobbering Meta's core advertising business, and FB users are fleeing its platforms for the likes of TikTok and other rivals. Making matters worse, Meta issued a dismal outlook. The fact that the company is plowing billions of dollars into the metaverse – a perhaps decade-long project with no guarantee of a payoff – has upended sentiment on the name.

Interestingly, at least some hedge funds appear to have anticipated this regime change. As a group, hedge funds sold a net of more than 41 million shares in Meta in the fourth quarter. The number of hedge funds holding FB stock fell to 641, or 35% of all hedge funds, from 669, or 38%, in Q3. Hedge funds counting FB as a top 10 holding declined as well.

Although new positions rose to 68 hedge funds in Q4 from 36 in the prior quarter, hedge funds closing their positions vaulted to 77 from 48.

Meta suffered a series of analyst downgrades in February, but the Street still gives it a consensus recommendation of Buy, with high conviction to boot. Of the 53 analysts issuing opinions on FB tracked by S&P Global Market Intelligence, 32 rate it at Strong Buy, eight say Buy, 12 call it a Hold and one says Sell.

• Market value: $1.78 trillion
• Dividend yield: N/A
• Analysts' consensus recommendation: 1.31 (Strong Buy)

It should come as no surprise that hedge funds are big believers in Google parent Alphabet (GOOGL, $2,689.19).

Nearly 36% of all hedge funds, or 653 in total, owned this blue-chip tech stock as of Dec. 31, up from 636 hedge funds in the third quarter. Of those hedge funds, almost 14%, or 250, counted GOOGL among their top 10 holdings, down from 253 in the previous quarter.

New positions nearly doubled, to 67 hedge funds from 35 in Q3, and the number of hedge funds increasing their stakes rose too. The number of hedge funds closing or reducing their holdings also fell in Q4 vs. Q3. Collectively, however, hedge funds were net sellers of GOOGL stock, albeit by a measly 134,238 shares.

The bull case on Alphabet is pretty easy to sum up. Thanks to its domination in search and other web services, Google is the prime beneficiary of the relentless growth in digital advertising spending.

"While Alphabet has often been criticized as a 'Johnny One Note' for its dependence on digital advertising, the powerful ramp-up in digital advertising as economies have reopened, combined with Google's dominant position, has certainly been a financial plus that shows little sign of weakening," writes Argus Research analyst Joseph Bonner (Buy).

The Street concurs with Argus' take, giving GOOGL a rare consensus recommendation of Strong Buy. Thirty-four analysts call the stock a Strong Buy, 13 say Buy and one has it at Hold.

Like a number of names on this list, Google is also one of the best 30 stocks of the past 30 years.

• Market value: $1.57 trillion
• Dividend yield: N/A
• Analysts' consensus recommendation: 1.28 (Strong Buy)

Amazon.com (AMZN, $3,075.77), with its massive market value and dominance in e-commerce, routinely ranks among hedge funds' very favorite blue-chip stocks.

Indeed, 40% of all hedge funds, or 730, owned AMZN as of the fourth quarter’s end. That's up from 681 hedge funds in Q3. But the bullishness hardly stops there.

The number of hedge funds initiating stakes in the tech and retailing colossus rose more than tripled, to 110 from 34 in the prior three-month period. Hedge funds increasing their holdings rose too. Meanwhile, the number of hedge funds exiting their stakes tumbled to 43 from 74, and those that reduced their holdings fell to 204 in Q4 from 247 in Q3.

All told, hedge funds were net buyers of 1.4 million AMZN shares in the final quarter of 2021.

Even Warren Buffett is in on the act. Berkshire Hathaway has been an Amazon shareholder since 2019.

The Street gives Amazon a rare Strong Buy consensus recommendation, and with high conviction at that. Of the 50 analysts issuing opinions on the stock tracked by S&P Global Market Intelligence, 36 say Strong Buy and 14 rate it at Buy.

It's fair to assume that hedge funds are impressed by this already massive company's ability to defy the law of large numbers. Consider that Amazon has a market value of $1.57 trillion. And somehow the company is still forecast to generate average annual EPS growth of nearly 28% over the next three to five years.

• Market value: $2.23 trillion
• Dividend yield: 0.8%
• Analysts' consensus recommendation: 1.34 (Strong Buy)

Quarter after quarter, Microsoft (MSFT, $297.31) routinely ranks as hedge funds' top blue-chip stock to buy.

Nearly 42% of all hedge funds, or 761 in total, own shares in this juggernaut of the Dow Jones Industrial Average. That's up from 741 hedge funds in Q3. More than a quarter of all hedge funds, or 458, have MSFT as a top 10 holding, up from 416 hedge funds in Q3. Hedge funds initiating stakes rose to 68 in Q4 from 50 in the previous three-month period, but then those closing their positions rose to 31 from 19 in Q3.

The number of hedge funds reducing their exposure to MSFT ticked up as well, while the number increasing their holdings was essentially unchanged.

The bottom line is that hedge funds sold a net of 25.7 million shares in Microsoft in Q4.

What gives Microsoft the edge over Apple when it comes to hedge funds' interest is its overwhelming success in cloud services with products such as Azure and Office 365. Analysts say companies' digital transformation to cloud services represents a $1 trillion total addressable market – a market MSFT is especially well positioned to exploit.

Microsoft also gets a rare Strong Buy consensus recommendation, making it Wall Street's highest rated Dow stock, according to S&P Global Market Intelligence. Thirty-two analysts say Strong Buy, 14 call it a Buy and one has it at Hold.

Microsoft also happens to be the second-best stock of the past 30 years, having created $1.91 trillion in shareholder wealth between 1990 and 2020.