1 Dow Jones Stock with Exciting Potential and 2 to Turn Down

While the Dow Jones (^DJI) represents industry leaders, not every stock in the index is a safe bet. Some are facing headwinds like declining demand, rising costs, or disruptive new competitors.

Just because a company is in the Dow Jones doesn’t mean it’s a great investment, and StockStory is here to help you separate winners from laggards. That said, here is one Dow Jones stock that will likely remain a market leader and two that may struggle.

Two Stocks to Sell:

Sherwin-Williams (SHW)

Market Cap: $88.97 billion

Widely known for its success in the paint industry, Sherwin-Williams (NYSE:SHW) is a manufacturer of paints, coatings, and related products.

Why Does SHW Fall Short?

1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 2.5%
3. Free cash flow margin dropped by 8.5 percentage points over the last five years, implying the company became more capital intensive as competition picked up

At $355 per share, Sherwin-Williams trades at 29x forward P/E. Read our free research report to see why you should think twice about including SHW in your portfolio.

Verizon (VZ)

Market Cap: $182.7 billion

Formed in 1984 as Bell Atlantic after the breakup of Bell System into seven companies, Verizon (NYSE:VZ) is a telecom giant providing a range of communications and internet services.

Why Do We Steer Clear of VZ?

1. Customer additions have disappointed over the past two years, indicating the company’s value proposition may not be resonating
2. Projected 2.2 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

Verizon is trading at $43.35 per share, or 9.2x forward P/E. If you’re considering VZ for your portfolio, see our FREE research report to learn more.

One Stock to Buy:

Nvidia (NVDA)

Market Cap: $3.40 trillion

Founded in 1993 by Jensen Huang and two former Sun Microsystems engineers, Nvidia (NASDAQ:NVDA) is a leading fabless designer of chips used in gaming, PCs, data centers, automotive, and a variety of end markets.

Why Is NVDA a Good Business?

1. Annual revenue growth of 140% over the last two years was superb and indicates its market share increased during this cycle
2. Share repurchases over the last five years enabled its annual earnings per share growth of 80.2% to outpace its revenue gains
3. Robust free cash flow margin of 48.8% gives it many options for capital deployment, and its growing cash flow gives it even more resources to deploy

Nvidia’s stock price of $137.81 implies a valuation ratio of 29.5x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as ServiceNow (+178% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.