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1 Dow Jones Stock with Exciting Potential and 2 Facing Headwinds
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.
Finding the best companies in the Dow Jones isn’t always straightforward, and that’s why we started StockStory. Keeping that in mind, here is one Dow Jones stock that could be a good addition to your portfolio and two that may face some trouble.
Two Stocks to Sell:
IBM (IBM)
Market Cap: $193.4 billion
With a corporate history spanning over a century and once known for its iconic mainframe computers, IBM (NYSE:IBM) provides hybrid cloud computing platforms, AI solutions, consulting services, and enterprise infrastructure to help businesses modernize their operations.
Why Do We Think Twice About IBM?
- Annual sales growth of 4.3% over the last five years lagged behind its business services peers as its large revenue base made it difficult to generate incremental demand
- Estimated sales growth of 3% for the next 12 months implies demand will slow from its two-year trend
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 8.6% annually
IBM’s stock price of $204.95 implies a valuation ratio of 16.9x forward P/E. Dive into our free research report to see why there are better opportunities than IBM.
JPMorgan Chase (JPM)
Market Cap: $925.6 billion
Tracing its roots back to 1799 when its earliest predecessor was founded by Aaron Burr, JPMorgan Chase (NYSE:JPM) is a leading financial services company offering investment banking, consumer banking, commercial banking, and asset management services globally.
Why Are We Wary of JPM?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 7.8% over the last two years was below our standards for the banking sector
- Net interest margin of 2.5% is well below other banks, signaling its loans aren’t very profitable
- Projected 2.4 percentage point efficiency ratio increase over the next year signals its day-to-day expenses will rise
At $349.00 per share, JPMorgan Chase trades at 2.5x forward P/B. If you’re considering JPM for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Merck (MRK)
Market Cap: $314.8 billion
With roots dating back to 1891 and a portfolio that includes the blockbuster cancer immunotherapy Keytruda, Merck (NYSE:MRK) develops and sells prescription medicines, vaccines, and animal health products across oncology, infectious diseases, cardiovascular, and other therapeutic areas.
Why Do We Like MRK?
- Dominant market position is represented by its $65.77 billion in revenue, which creates significant barriers to entry in this highly regulated industry
- Adjusted operating profits increased over the last two years as the company gained some leverage on its fixed costs and became more efficient
- MRK is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Merck is trading at $127.33 per share, or 20.6x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.