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 But even blue-chip stocks can struggle - some are dealing with slowing growth, outdated business models, or increasing competition.
Finding the best companies in the Dow Jones isn’t always straightforward, and that’s why we started StockStory. Keeping that in mind, here are three Dow Jones stocks that don’t make the cut and some better choices instead.
Salesforce (CRM)
Market Cap: $257.3 billion
Launched in 1999 from a rented one-bedroom apartment in San Francisco by Marc Benioff and his three co-founders, Salesforce (NYSE: CRM) is a software-as-a-service platform that helps companies access, manage, and share sales information such as leads.
Why Is CRM Not Exciting?
- Annual sales growth of 11.4% over the last three years lagged behind its software peers as its large revenue base made it difficult to generate incremental demand
- Customers were hesitant to make long-term commitments to its platform as its 8.7% average ARR growth over the last year was sluggish
- Estimated sales growth of 9.1% for the next 12 months implies demand will slow from its three-year trend
Salesforce’s stock price of $269.49 implies a valuation ratio of 6.2x forward price-to-sales. Read our free research report to see why you should think twice about including CRM in your portfolio.
Honeywell (HON)
Market Cap: $142.4 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 Does HON Worry Us?
- 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
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 4.8%
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 2.6 percentage points
Honeywell is trading at $224.21 per share, or 20.9x forward P/E. Check out our free in-depth research report to learn more about why HON doesn’t pass our bar.
Sherwin-Williams (SHW)
Market Cap: $84.56 billion
Widely known for its success in the paint industry, Sherwin-Williams (NYSE: SHW) is a manufacturer of paints, coatings, and related products.
Why Do We Think Twice About SHW?
- 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 2.5% for the next 12 months is soft and implies weaker demand
- Free cash flow margin shrank by 7.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
At $340.10 per share, Sherwin-Williams trades at 27x forward P/E. If you’re considering SHW for your portfolio, see our FREE research report to learn more.
Stocks We Like More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.
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