The Dow Jones (^DJI) is home to corporate giants, but size alone doesn’t guarantee success. A few of these companies are struggling with weak fundamentals, paradigm shifts, or poor execution.
Not all Dow Jones stocks are worth owning - which is why we built StockStory to help you invest wisely. Keeping that in mind, here are three Dow Jones stocks that don’t make the cut and some better choices instead.
Disney (DIS)
Market Cap: $181 billion
Founded by brothers Walt and Roy, Disney (NYSE: DIS) is a multinational entertainment conglomerate, renowned for its theme parks, movies, television networks, and merchandise.
Why Do We Think DIS Will Underperform?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 9.2% over the last five years was below our standards for the consumer discretionary sector
- Low free cash flow margin of 10.3% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Disney’s stock price of $104.77 implies a valuation ratio of 13.9x forward P/E. Check out our free in-depth research report to learn more about why DIS doesn’t pass our bar.
3M (MMM)
Market Cap: $94.2 billion
Producers of the first asthma inhaler, 3M Company (NYSE: MMM) is a global conglomerate known for products in industries like healthcare, safety, electronics, and consumer goods.
Why Are We Out on MMM?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Estimated sales growth of 4.9% for the next 12 months is soft and implies weaker demand
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
At $182.48 per share, 3M trades at 19.9x forward P/E. Read our free research report to see why you should think twice about including MMM in your portfolio.
Goldman Sachs (GS)
Market Cap: $315.7 billion
Founded in 1869 as a small commercial paper business in New York City, Goldman Sachs (NYSE: GS) is a global financial institution that provides investment banking, securities, asset management, and consumer banking services to corporations, governments, and individuals.
Why Does GS Worry Us?
- The company has faced growth challenges as its 3.5% annual revenue increases over the last five years fell short of other financials companies
- Earnings per share lagged its peers over the last five years as they only grew by 3% annually
- Annual tangible book value per share growth of 4.9% over the last two years lagged behind its financials peers as its large balance sheet made it difficult to generate incremental capital growth
Goldman Sachs is trading at $1,043 per share, or 14.9x forward P/E. If you’re considering GS for your portfolio, see our FREE research report to learn more.
Stocks We Like More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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.
