What would be the one best stock to invest in from dow jones industrial average and why?
Answer:
If you are asking for one DJIA stock to invest in now and never have to think about again, I would nominate Johnson and Johnson. They are one of the most diversified stocks in the Dow (pharmaceuticals, medical devices, nutrition products, and consumer products), they are extremely well managed, none of their businesses is likely to become obsolete, and their current valuation is reasonable.
My second choice, Proctor & Gamble, shares many of these same attributes, although they are primarily consumer products beut extremely diversified in this area. GE would probably be my 3rd choice.
Most of the other DJIA stocks are concentrated in a single sector, and as such are less suited to a "buy and forget" approach. (Not that I recommend such an approach, mind you. I'm just answering your question.)
Good question! I always look for stocks that have a low P/E and pay a high dividend. Out of the 30 DOW components, I actually own 2 individually. Merck (MRK) and DuPont (DD). Both are P/E under 20 and pay a dividend. Merck, despite the Vioxx scandal has solid fundamentals and with people becoming more and more reliant on prescription drugs, I think the company will do well. DuPont is into so many markets both here and abroad with many revenue streams in non-dollar assets, I think they are an 'old economy' company that will long outshine this flimsy service economy we are depending on to carry us through.
Hope this helps!
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