We recently compiled a list of the 10 Best Performing Dow Stocks in 2024. In this article, we will look at where The Goldman Sachs Group, Inc. (NYSE:GS) ranks on our list of the best-performing Dow stocks in 2024.
The Dow Jones Industrial Average is one of the most closely watched stock indices globally, often considered a barometer of the overall health and trajectory of the American economy. As a price-weighted index, it is composed of 30 blue-chip companies from various sectors, excluding transportation and utilities. The Dow’s inclusion of companies from diverse industries such as technology, healthcare, finance, and consumer goods makes it a valuable indicator of market trends. Created in 1896 by Charles Dow, the Dow Jones Industrial Average has stood the test of time and, alongside the NASDAQ 100 and the S&P 500, remains one of the most recognized and influential stock market indices in the world.
The Dow’s journey over the past century has been marked by numerous highs and lows, often reflecting the broader economic conditions. For instance, the index experienced some of its worst single-day losses during the 2008 financial crisis. On September 29, 2008, the Dow plunged by 777.68 points, which was its largest single-day point drop at the time. The financial crisis, triggered by the collapse of Lehman Brothers and a series of banking failures, led to panic selling across global markets. That year, the Dow lost nearly 34% of its value, marking one of its worst annual performances. On the flip side, some of the best years in the Dow’s history include 1915, when it rose by a staggering 81.66%, and 1933, when it registered an annual gain of 63.74% amid a recovery from the Great Depression.
Fast forward to 2024, the Dow Jones Industrial Average has continued its volatile yet upward trajectory. As of September 20, 2024, the Dow closed at a new record high of 42,063.36 points, inching up by 38.17 points or 0.09% for the day. This milestone was reached after a period of substantial gains following the Federal Reserve’s decision to ease interest rates—the first such move in four years. The easing of monetary policy has provided a boost to the market, with investor sentiment improving and confidence in the resilience of the American economy strengthening.
Despite some mid-week volatility in the broader market, the Dow is expected to end September on a positive note. This rally was notable, considering the uncertainty surrounding the upcoming U.S. presidential elections, which has led many investors to take a cautious stance and refrain from making significant commitments until the political landscape becomes clearer. Tom Lee, co-founder and head of research at Fundstrat Global Advisors, highlighted this hesitancy during an appearance on CNBC’s “Closing Bell,” noting that “a lot of investors don’t want to commit capital until after Election Day. I don’t think it matters who wins; they just want to get that event behind them.”
Despite these uncertainties, the Dow has shown remarkable resilience, tracking to end the month of September higher. The 30-stock index has hit several fresh all-time highs throughout the year, demonstrating robust performance across key sectors. In fact, as of September 25, 2024, the Dow had reached a 52-week high of 42,299.64 points, representing a year-to-date (YTD) gain of 11.21% and a one-year change of 23.25%. These figures underscore the strength of the index and the performance of its constituent companies.
The success of the Dow in 2024 can be attributed to a range of factors. For one, leading technology and consumer goods companies, which form a significant part of the index, have continued to post strong earnings amid solid consumer demand and operational efficiencies. Moreover, the financial sector has also benefitted from the recent shifts in monetary policy, with lower interest rates driving increased borrowing and investment activities. Additionally, healthcare companies have maintained growth trajectories, as innovation and demand for services remain high in the post-pandemic era.
The top-performing stocks within the Dow Jones Industrial Average in 2024 have played a pivotal role in driving the index to record highs. These companies, known for their strong fundamentals, market leadership, and robust financial health, have outpaced broader market expectations. Investors seeking exposure to blue-chip companies with a track record of stability and consistent returns have found the Dow to be an attractive option.
In this article, we will delve into the 10 best-performing Dow stocks in 2024. From established technology giants to consumer staples that continue to dominate their respective industries, these stocks have led the charge in pushing the Dow Jones Industrial Average to new heights.
Our Methodology
For this article, we utilized a stock screener to identify DJIA index stocks that have shown significant gains year-to-date as of September 25, 2024. We arranged these stocks in ascending order based on their performance. Additionally, we examined the hedge fund sentiment surrounding these stocks, noting the number of hedge fund holders for each as of the end of Q2 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
The Goldman Sachs Group, Inc. (NYSE:GS) is a leading global investment banking, securities, and investment management firm that serves a broad range of clients, including corporations, financial institutions, governments, and high-net-worth individuals. Year to date, The Goldman Sachs Group, Inc. (NYSE:GS) share price has gained 27.31%, showcasing robust market performance. Hedge fund interest in the stock remains relatively high, with 68 funds holding stakes as of Q2 2024, compared to 72 in the previous quarter.
The Goldman Sachs Group, Inc. (NYSE:GS) posted strong financial results in the second quarter of 2024, beating earnings expectations. The company reported an earnings per share (EPS) of $8.62, surpassing analyst estimates of $8.35. This strong performance was driven by revenue growth across various business segments, particularly in global banking and markets, and asset wealth management.
The firm generated net revenues of $12.7 billion and net earnings of $3 billion during the second quarter. Its return on equity (ROE) stood at 10.9%, while the return on tangible equity (ROTE) was 11.6%, highlighting the efficiency in generating profits relative to shareholder equity. The company’s global banking and markets division produced revenues of $8.2 billion, up 14% year-over-year, driven by a 25% rise in equity underwriting revenues and a 39% increase in debt underwriting revenues. The investment banking backlog saw significant growth, reflecting the company’s ability to capitalize on the recovery in capital markets and mergers & acquisitions (M&A) activity.
The Goldman Sachs Group, Inc. (NYSE:GS) asset wealth management division also achieved impressive results, with revenues rising 27% year-over-year to $3.9 billion. The firm’s assets under supervision reached a record $2.9 trillion, while its total wealth management client assets rose to approximately $1.5 trillion. This segment delivered a 23% pre-tax margin for the first half of 2024, approaching its mid-term target of 25%.
Furthermore, The Goldman Sachs Group, Inc. (NYSE:GS) raised $36 billion year-to-date for its alternatives business and aims to exceed $50 billion in alternatives fundraising by year-end. The firm also returned $4.4 billion to shareholders through stock repurchases and dividends, demonstrating its commitment to enhancing shareholder value. Given its strong fundamentals and ability to capitalize on market opportunities, The Goldman Sachs Group, Inc. (NYSE:GS) remains a solid investment choice for 2024.
Overall GS ranks 6th on our list of the best-performing Dow stocks in 2024. While we acknowledge the potential of GS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.