With a violent growth-to-value rotation hitting the stock markets, it can be tempted to ditch AI high-flyers and other frothy tech plays for the big blue chips. When it comes to time-tested blue chips, the Dow Jones Industrial Average is a good place to look. The price-weighted index, which is also heavier in cheap cash cows, stood tall on Wednesday, rising 0.6%, while the S&P 500 and Nasdaq 100 shed 1.4% and 2.9%, respectively.
Depending on how diversified your portfolio is, Wednesday was either a bloodbath or a mildly negative day. In any case, I don’t think the rotation out of growth is over quite yet, nor do I think the Dow is done outpacing its two brothers after trailing them for most of the first half.
Whether the Dow is poised to beat the Nasdaq 100 in the second half, the following three Dow stocks look enticing right now.
UnitedHealth Group (UNH)
UnitedHealth Group (NYSE:UNH) is a health insurer that’s also the Dow Jones’ largest holding because it has the largest share price ($573 and change) of the 30 names. On Wednesday’s painful rotation, UNH stock shot up 4.5%, a remarkable move on a day that saw tech-heavy investors skating offside.
The company delivered a respectable second-quarter showing alongside a maintained outlook. Following the outstanding showing, Jefferies upgraded the stock to a buy due to the growth trajectory going into 2025.
Indeed, UnitedHealth and the rest of the health insurers have been through a lot in the past year. With UNH stock breaking out to a new all-time high on the back of a solid showing, perhaps investors seeking growth beyond tech should stash the name on a watchlist.
Even after the post-earnings pop, the name doesn’t look pricy at 19.8 times forward price-to-earnings (P/E). Also, the 1.5% dividend yield is a nice bonus.
Intel (INTC)
Don’t look now, but Intel (NASDAQ:INTC) is outperforming its semiconductor peers again. On a day when the VanEck Semiconductor ETF (NASDAQ:SMH) shed more than 7% of its value, INTC stock ended the day in the green, up 0.3%.
Indeed, Intel’s shares were descending steadily into the close, but nevertheless, Intel was an industry outperformer on a day that likely had many semi-heavy investors in a bit of a panic over Donald Trump’s Taiwan comments.
I don’t think we’ve seen the last of Intel stock’s relative outperformance. After underperforming by a wide margin in the first half, Intel is one of few AI chip plays with expectations in a fairly low spot.
Indeed, a lower earnings bar could be the formula for big upside surprises in future quarterly reports. However, Intel needs to deliver on its AI promises. If it can, perhaps INTC stock will be the envy of the industry for a change.
JPMorgan Chase (JPM)
JPMorgan (NYSE:JPM) also had a great day, surging 1.5% to hit a new all-time high of just shy of $217 per share. Indeed, investors are still feeling good about the bank stock after digesting the wonderful second-quarter earnings results propelled by strength in investment banking.
Even after surging more than 26% year to date, shares of the $617 billion bank are still dirt-cheap at 12.1 times trailing P/E. The dividend yields 2.1% and looks attractive, especially given it’s poised to keep growing at a respectable rate.
Long-time CEO Jamie Dimon is a wonderful leader, and I believe his leadership alone makes JPM stock worth buying over any other banks, including the cheaper ones that are also at fresh new highs post-earnings.
On the date of publication, Joey Frenette did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
