Key insights
- The article identifies potential underperformers within the Dow Jones Industrial Average, specifically highlighting concerns about Salesforce's ARR growth and Honeywell's underperforming core business and eroding returns on capital. This suggests a slightly bearish outlook for these specific stocks, but the overall impact on the broader US equity market is limited.
The Dow Jones (^DJI) is made up of 30 of the most established and influential companies in the market. But even blue-chip stocks can struggle - some are dealing with slowing growth, outdated business models, or increasing competition.
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 face some trouble.
Market Cap: $148.7 billion
With its cloud-based platform named after its stock ticker symbol CRM (Customer Relationship Management), Salesforce (NYSE:CRM) provides customer relationship management software that helps businesses connect with their customers across sales, service, marketing, and commerce.
Why Does CRM Give Us Pause?
Underwhelming ARR growth of 10.3% over the last year suggests the company faced challenges in acquiring and retaining long-term customers
Anticipated sales growth of 11% for the next year implies demand will be shaky
Operating margin improvement of 1 percentage points over the last year demonstrates its ability to scale efficiently
Salesforce is trading at $181.28 per share, or 3.8x forward price-to-sales. Check out our free in-depth research report to learn more about why CRM doesn’t pass our bar.
Market Cap: $135 billion
Originally founded in 1906 as a thermostat company, Honeywell (NASDAQ:HON) is a multinational conglomerate known for its aerospace systems, building technologies, performance materials, and safety and productivity solutions.
Why Do We Steer Clear of HON?
Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
Efficiency has decreased over the last five years as its operating margin fell by 4 percentage points
Eroding returns on capital suggest its historical profit centers are aging
At $217.79 per share, Honeywell trades at 20.2x forward P/E. Read our free research report to see why you should think twice about including HON in your portfolio, it’s free.
Market Cap: $600.6 billion
Processing over 829 million transactions daily and connecting billions of cards to 150 million merchant locations worldwide, Visa (NYSE:V) operates one of the world's largest electronic payments networks, facilitating secure money movement across more than 200 countries through its VisaNet processing platform.
Why Is V a Top Pick?
Impressive 15% annual revenue growth over the last five years indicates it’s winning market share this cycle
Share repurchases have increased shareholder returns as its annual earnings per share growth of 20.1% exceeded its revenue gains over the last five years
Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
Visa’s stock price of $318.80 implies a valuation ratio of 23.1x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.