The Daily Dow
Thursday, July 24, 1997
by Robert Sheard

LEXINGTON, KY. (July 24, 1997) -- One of the benefits of investing in Dow stocks is that they've generally performed consistently well over many years. As we all know, when a Blue Chip stock gets on a roll, it can last for years, as the company gains market share or comes to dominate an industry.

One way to demonstrate this is to list the long-term performance of the best Dow stocks in recent years. Here, then, is a list of the top ten Dow stocks over the past three years (through mid July) and the stock's annualized total return for that period. (Not all of the stocks were in the Dow the whole period, of course, but I've limited the list to the current 30 Dow components.)

Travelers Group (TRV) 58.36%
Merck & Co. (MRK) 54.58%
Coca-Cola (KO) 51.40%
Int'l Business Machines (IBM) 47.10%
Johnson & Johnson (JNJ) 46.59%
American Express (AXP) 45.78%
Hewlett-Packard (HWP) 45.42%
General Electric (GE) 44.06%
Philip Morris (MO) 43.53%
Procter & Gamble (PG) 41.10%

Not surprisingly, these ten are at it again in 1997. The average year-to-date total return for the group is 35.75%.

The trend of great Blue Chips staying on top of the game plays out over a longer period as well. The following list shows the ten best current Dow stocks over the last five years, presented with their annualized returns over that period.

Travelers Group (TRV) 47.07%
Caterpillar (CAT) 33.90%
American Express (AXP) 32.86%
Union Carbide (UK) 32.33%
Sears, Roebuck (S) 31.11%
General Electric (GE) 30.57%
Coca-Cola (KO) 29.49%
United Technologies (UTX) 29.44%
Hewlett-Packard (HWP) 28.09%
Procter & Gamble (PG) 27.79%

The five-year leaders are doing even better than the group of three-year leaders so far in 1997, gaining an average of 39.91%.

Six stocks were on both lists: American Express, Coca-Cola, General Electric, Hewlett-Packard, Procter & Gamble, and Travelers Group. The average return for these six stocks so far in 1997 has been an impressive 43.48%. Maybe there's a long-term relative strength approach buried in these numbers somewhere? Whether we uncover one or not, there's much to be said for buying quality.

For a similar analysis extended to the 100 largest American stocks, check out today's Foolish Workshop report. Fool on!

(c) Copyright 1997, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool. ________________________________

Stock  Change   Last
--------------------
T    -   1/16  35.63
GM   -  11/16  58.31
CHV  +   1/8   76.88
MMM  -2 13/16  95.63

          Day   Month    Year
        FOOL-4   -0.91%   0.83%   3.01%
        DJIA     +0.35%   5.68%  25.88%
        S&P 500  +0.40%   6.23%  26.94%
        NASDAQ   +0.09%   8.81%  21.54%

    Rec'd   #  Security     In At       Now    Change
   1/2/97  153 Chevron       65.00     76.88    18.27%
   1/2/97  120 3M            83.00     95.63    15.21%
   1/2/97  179 Gen. Motor    55.75     58.31     4.60%
   1/2/97  479 AT&T          41.75     35.63   -14.67%


    Rec'd   #  Security     In At     Value    Change
   1/2/97  153 Chevron     9945.00  11761.88  $1816.88
   1/2/97  120 3M          9960.00  11475.00  $1515.00
   1/2/97  179 Gen. Motor  9979.25  10437.94   $458.69
   1/2/97  479 AT&T       19998.25  17064.38 -$2933.88


                             CASH    $767.60
                            TOTAL  $51506.79