How Are 2007’s Top Dow Stocks Performing This Year?

Last year the Dow Jones Industrial Average gained over 800 points to finish the year with a moderate, but acceptable gain of 6.4%. Nineteen of the 30 Dow stocks posted gains with fifteen posting double-digit gains. In fact, five of the Dow stocks had returns of over 30% last year. So how are last year’s top performers doing this year?

Merck (MRK: 38.4799 -0.39%)

Last year’s top Dow stock was Merck, which posted an incredible 37.4% gain. Unfortunately, this year it has been one of the worse performers, with shares losing over 40%. Negative media coverage along with the US non-approval of Cordaptive has weighed heavily on the shares. However, the company’s management is still very optimistic about the long-term outlook of the company and has continually hinted that more light will be shed regarding these future plans at the December Investor Day.

McDonald’s (MCD: 99.9786 -0.92%)

The ever-popular fast-food chain posted a spectacular 36.4% gain last year and is the only one of last year’s top-performers to show a gain this year. To date, MCD’s shares have been immune to the global slowdown and are up 4%. Strong worldwide sales along with a some key menu changes (e.g. Iced coffees, $1 drinks, Value menu) have allowed the company to continue to beat analysts estimates the last three quarters.

Intel (INTC: 26.88 +0.90%)

After delivering a brilliant 34.3% return last year, INTC’s shares have slid over 21% in 2008. Macro environment concerns have continued to weigh on this stock despite beating analyst top and bottom line estimates in the previous quarter.

Chevron (CVX: 106.72 -0.10%)

The recent free-fall in oil prices has erased CVX’s earlier market gains and now shares are down 11% from the beginning of the year. After finishing last year with an impressive 30.6% gain to $91.36, CVX’s shares traded above $100 during the early summer when oil prices were approaching $150/barrel. Now with oil below $110, the company has lowered expectations for 2008/2009 taking it’s stock price with it.

Coca Cola (KO: 68.34 -0.31%)

Finally, we get to Coca Cola who saw their shares gain just over 30% last year, but have dropped almost 15% this year due primarily to the slowing macro environment. The rising U.S. dollar is also weighing on KO’s shares as almost 80% of their operating income comes from international markets. In addition, rising fuel costs and falling consumer discretionary incomes have caused many investors to exit their positions.