- Chevron, Goldman Sachs, and Honeywell offer significant upside potential as the Dow hits a new all-time high.
- These blue-chip giants benefit from resilient business models, strong financial health, and shareholder-friendly dividend policies.
- InvestingPro's AI-powered models highlight substantial growth prospects, making these stocks attractive investments.
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As the Dow Jones Industrial Average continues its march to new all-time highs, investors are increasingly looking toward blue-chip stocks that offer both stability and growth potential.
Source: Investing.com
Among the 30 giants that make up the Dow, Chevron (NYSE:CVX), Goldman Sachs (NYSE:GS), and Honeywell (NASDAQ:HON) stand out as top picks with significant upside potential.
These companies not only benefit from robust tailwinds in their respective sectors but also show promise for future growth as reflected in their AI-powered Fair Value estimates on InvestingPro.
Let's explore why these Dow giants should be on your radar.
1. Chevron
- Current Price: $146.95
- Fair Value Price Target (NYSE:TGT): $185.18 (+26% Upside)
Chevron, one of the world’s largest oil and gas companies, is well-positioned to capitalize on the ongoing recovery in global energy markets.
With operations spanning across the entire energy spectrum—from oil exploration and production to refining and chemical manufacturing—Chevron stands to benefit from rising energy prices and increasing demand for fossil fuels.
The company’s strategic investments in renewable energy and carbon capture technology also position it well for the future as the world shifts towards cleaner energy sources.
Source: Investing.com
CVX stock closed at $146.95 on Tuesday, earning the San Ramon, California-based energy giant a valuation of $268.7 billion. Shares are down 1.5% year-to-date.
According to the AI-powered Fair Value models on InvestingPro, Chevron has an impressive upside potential of +26% to its Fair Value price estimate of $185.18.
This is further supported by the company’s above-average Financial Health Score, which reflects its strong balance sheet and ability to generate consistent cash flows. 
Source: InvestingPro
Additionally, the oil and gas behemoth’s focus on cost discipline and capital efficiency has strengthened its financial position, allowing it to continue returning capital to shareholders.
Chevron’s commitment to shareholder returns is evident in its 36-year streak of increasing annual dividend payouts, a record that highlights its resilience and profitability.
2. Goldman Sachs
- Current Price: $507.26
- Fair Value Price Target: $553.43 (+9.1% Upside)
Goldman Sachs, a global leader in investment banking and financial services, continues to navigate the complex financial landscape with remarkable agility.
The firm’s diversified business model, which includes investment banking, asset management, and trading, allows it to capitalize on various market conditions.
As the global economy stabilizes, Goldman Sachs is poised to benefit from increased deal-making activity, higher trading volumes, and rising demand for financial advisory services.
This consistent performance, coupled with a focus on innovation, positions the Wall Street powerhouse as a key player in the financial sector, ready to capitalize on emerging opportunities.
Source: Investing.com
GS stock ended Tuesday’s session at $507.26, not far from a recent all-time high of $517.26 reached on July 31. At current levels, the New York-based investment banking behemoth has a market cap of $169 billion. Shares are up 31.5% in 2024.
Goldman Sachs is seen as a solid investment with a +9.1% upside potential to its Fair Value price target of $553.43, according to InvestingPro’s AI-powered models.
The company’s solid Financial Health Score is a testament to its robust profitability and sound financial management.
Source: InvestingPro
Goldman’s strong capital position and focus on cost management further enhance its ability to deliver value to shareholders.
The financial services firm has consistently increased its dividend payout for 12 consecutive years, underscoring its commitment to returning capital to investors.
3. Honeywell
- Current Price: $206.11
- Fair Value Price Target: $245.61 (+19.2% Upside)
Honeywell, a diversified industrial conglomerate, is another Dow giant with significant upside potential. The company operates in a wide range of industries, including aerospace, building technologies, performance materials, and safety solutions.
Its diversified portfolio and exposure to high-growth sectors like aerospace and industrial automation position it to benefit from strong demand trends in these markets.
As global economies reopen and industrial activity picks up, Honeywell’s businesses are expected to see a surge in demand.
The company’s focus on innovation and digital transformation, particularly in areas like connected buildings and advanced manufacturing, further strengthens its growth prospects.
Source: Investing.com
HON shares closed at $206.11 last night, valuing the Charlotte, North Carolina-based company at $133.9 billion.
The company’s AI-powered Fair Value models on InvestingPro indicate a +19.2% upside potential to its Fair Value price target of $245.61.
Honeywell’s above-average Financial Health Score reflects its strong earnings power and ability to navigate economic cycles effectively.
Source: InvestingPro
The industrial giant’s consistent focus on operational efficiency and cost control has also contributed to its strong financial performance.
With an impressive 13-year streak of raising its annual dividend payout, Honeywell remains committed to delivering value to shareholders.
Conclusion
As the Dow Jones Industrial Average reaches new highs, investors should consider adding Chevron, Goldman Sachs, and Honeywell to their portfolios.
These blue-chip giants not only offer significant upside potential as per InvestingPro’s AI-powered Fair Value models but also boast strong financial health and a commitment to returning capital to shareholders.
With resilient business models and profitable operations, these companies are well-positioned to continue delivering value in the years ahead.
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Disclosure: At the time of writing, I am long on the S&P 500, and the Nasdaq 100 via the SPDR® S&P 500 ETF, and the Invesco QQQ Trust ETF. I am also long on the Technology Select Sector SPDR ETF (NYSE:XLK).
I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies' financials.
The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.
Follow Jesse Cohen on X/Twitter @JesseCohenInv for more stock market analysis and insight.