Business
The Stocks That Punch Above Their Weight in the Dow
Some professional investors look at the Dow industrials with a bit of suspicion since the largest companies by market value aren’t given the biggest weight in the index, as is the case for other benchmarks like the S&P 500 and Nasdaq composite.
The top five stocks by market cap in the 30-stock Dow are Nvidia, Apple, Microsoft, Amazon and Walmart. They would represent 69% of the index if it were market-cap weighted.
As it stands under the Dow’s methodology of giving more weight to higher priced stocks, the top five are Goldman Sachs, Caterpillar, Microsoft, Home Depot and Amgen. They make up about 35% of the index.
Home Depot has a weighting of about 4.7% in the blue-chip average, according to Dow Jones Market Data. If the Dow were sorted by market cap, its weighting would be only 1.7%.