6 Dow Stocks That Should Drive These ETFs Higher

The splendid run of the Dow Jones Industrial Average since Trump’s win in the presidential election is known to all. In its northbound march, the blue-chip index crossed 25,000 for the first time in its 120-year history on Jan 4 and was just 200 points away from hitting 26,000 as of Jan 12, 2018. The index breached the 20,000-mark on Jan 6, 2017 and the rest is history.

Dow Jones Industrial Average has surged 60.3% in the last two years and gained about 30.1% in the last year (as of Jan 12, 2018). Trump’s tax reform and promises of deregulation acted as the wind beneath the wings. While almost all stocks staged solid performances lately on the passing of the tax reform, a few are likely to soar higher in the days to come.

Below we highlight those stocks and the related ETFs that are set to gain ahead.

Boeing

As per an article published on MarketWatch, Boeing Co. BA indicated that it would shell out $300 million on workforce-related and charitable investments. The tax reform enables Boeing “to better compete on the world stage and give us a stronger foundation for the investment in innovation, facilities and skills that will support our long-term growth.”

The Zacks Rank #3 (Hold) stock has about 11% weight in iShares U.S. Aerospace & Defense ETF ITA), 7% focus on PowerShares Aerospace & Defense PPA), and another 7% on Industrial Select Sector SPDR Fund XLI (read: 8 Power-Packed ETFs for 2018).

Wal-Mart

Wal-Mart Stores Inc. WMT announced recently that it plans to use its tax savings by hiking the starting pay for hourly workers to $11, effective during the Feb 17, 2018 pay cycle and paying up to $1,000 in a one-time cash bonus to suitable associates based on seniority.

Wal-Mart indicated that it paid high effective tax rates for years. So, the reduction in the corporate tax rate will make the United States more competitive on the global stage, and boost investment at the domestic level.

The Zacks Rank #2 (Buy) stock puts about 9.9% weight in iShares Edge MSCI Multifactor Consumer Staples ETF CNSF and 7.9% in Consumer Staples Select Sector SPDR Fund XLP (read: Staples ETFs: What Investors Need to Know).

Caterpillar

Caterpillar Inc. CAT expects the bill to be “positive” for the company and American manufacturers. Caterpillar also agrees about a more competitive environment in the United States and around the world. The access to overseas cash without bearing any additional U.S. taxes would be a great positive for the company.

The Zacks Rank #2 stock has 4.5% weight in SPDR Dow Jones Industrial Average ETF DIA and 4.2% focus on Guggenheim Dow Jones Industrial Average Dividend ETF DJD (read: Industrial ETFs at All-Time Highs: Any Value Left for 2018?).

Coca-Cola

Coca-Cola Co. KO said the bill would make it easier for the company to reinvest in its U.S. business. The reform would better enable the company to reinvest in the U.S. business system as it is on its way to becoming a total beverage company.

The Zacks Rank #3 stock has about 9.5% exposure to Consumer Staples Select Sector SPDR Fund XLP and 9.2% focus on Fidelity MSCI Consumer Staples Index ETF FSTA.

Travelers

Travelers TRV is reportedly among the companies offering employees bonuses of $1,000 each if they earn $75,000 or less annually. The company intends to pass on the tax benefits to some front-line employees.

The Zacks Rank #1 stock has about 8% exposure to PowerShares KBW Property & Casualty Insurance Portfolio KBWP and 5.2% focus on iShares U.S. Insurance ETF IAK. The Zacks Industry Rank is in the top 19% (read: ETF Strategies Based on Billionaires' Choices).

Cisco Systems

Cisco Systems Inc. CSCO also believes that the previous tax laws made American companies non-competitive in the overseas markets.

The Zacks Rank #3 stock has 8.8% weight in iShares North American Tech-Multimedia Networking ETF IGN and 8.4% in First Trust NASDAQ Technology Dividend Index Fund TDIV (read: ETFs Set to Surge as Cisco Sees Revenue Growth in 2 Years).

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Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
 
Boeing Company (The) (BA) : Free Stock Analysis Report
 
Coca-Cola Company (The) (KO) : Free Stock Analysis Report
 
SPDR-CONS STPL (XLP): ETF Research Reports
 
SPDR-INDU SELS (XLI): ETF Research Reports
 
ISHARS-US AEROS (ITA): ETF Research Reports
 
ISHRS-EMS MCS (CNSF): ETF Research Reports
 
ISHARS-US INSUR (IAK): ETF Research Reports
 
FT-NDQ TECH DIF (TDIV): ETF Research Reports
 
PWRSH-K P&C INS (KBWP): ETF Research Reports
 
GUGG-DJIA DVD (DJD): ETF Research Reports
 
FID-STAPLES (FSTA): ETF Research Reports
 
ISHARS-NA TEC-M (IGN): ETF Research Reports
 
PWRSH-AERO&DEF (PPA): ETF Research Reports
 
The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report
 
Citigroup Inc. (C) : Free Stock Analysis Report
 
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