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. That said, here is one Dow Jones stock that will likely remain a market leader and two best left off your watchlist.
Two Stocks to Sell:
Walmart (WMT)
Market Cap: $923.2 billion
Known for its large-format Supercenters, Walmart (NASDAQ: WMT) is a retail pioneer that serves a budget-conscious consumer who is looking for a wide range of products under one roof.
Why Do We Think Twice About WMT?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 5.3% over the last three years was below our standards for the consumer retail sector
- Gross margin of 24.9% is below its competitors, leaving less money for marketing and promotions
- Subpar operating margin of 4.2% constrains its ability to invest in process improvements or effectively respond to new competitive threats
At $116.05 per share, Walmart trades at 38x forward P/E. Read our free research report to see why you should think twice about including WMT in your portfolio.
Procter & Gamble (PG)
Market Cap: $334.9 billion
Founded by candle maker William Procter and soap maker James Gamble, Procter & Gamble (NYSE: PG) is a consumer products behemoth whose product portfolio spans everything from facial tissues to laundry detergent to feminine care to men’s grooming.
Why Are We Wary of PG?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Estimated sales growth of 1.9% for the next 12 months is soft and implies weaker demand
- Static operating margin over the last year shows it couldn’t become more efficient
Procter & Gamble is trading at $144.21 per share, or 20.8x forward P/E. To fully understand why you should be careful with PG, check out our full research report (it’s free).
One Stock to Buy:
Microsoft (MSFT)
Market Cap: $3.66 trillion
Originally named "Micro-soft" for microcomputer software when founded in 1975, Microsoft (NASDAQ: MSFT) is a global technology company that develops software, cloud services, devices, and AI solutions for consumers, businesses, and organizations worldwide.
Why Is MSFT a Good Business?
- Microsoft is one of the great brands not just in tech but all of business. It produces mission-critical software and bundles it together, resulting in cream-of-the-crop gross margins.
- The company’s elite unit economics lead to robust profit margins that improve over time. This speaks to the scale advantages and operating efficiency across its diverse portfolio, which spans everything from Office and Azure to Minecraft.
- Microsoft has a virtuous cycle of returns. Its dominant market position enables it to generate strong free cash flow, and it reinvests these funds into promising ventures that further strengthen its competitive moat.
Microsoft’s stock price of $489.00 implies a valuation ratio of 25.7x forward price-to-earnings. Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth 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.
