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Dow Stocks -- Worst to Best

(, starting today and ending Friday, will review all 30 Dow stocks. Six Dow stocks will be featured each day.)

BOSTON ( TheStreet) -- Dow stocks account for some of the biggest and most respected companies in the world from a range of industries, such as Wal-Mart (WMT), Exxon Mobil (XOM) and Microsoft (MSFT).

The Dow, which contains 30 companies, is a gauge for equity performance, a benchmark for large-cap mutual funds and a proxy for the American economy. Like the economy, the stock market is faltering. The Dow fell 3.1% last month, the steepest decline since February 2009. That doesn't mean investors can't make money. The simplest way for a manager to beat the stock market, in theory, is to cherry-pick the most attractive Dow stocks.

Selecting the top Dow stocks is no easy task. This week, will rank the Dow components based on our proprietary quantitative model, which takes into account financial strength, volatility, growth potential, performance and dividends, to project those most likely to fare well in the coming year.

Today we begin with the bottom of the barrel. While these stocks may be the least favored, it's important to note that none carry "sell" ratings.

#30. Alcoa (AA - Get Report)

Alcoa, a Pittsburgh-based aluminum company, recently reported fourth-quarter earnings that fell short of analysts' expectations. The model rates Alcoa "hold" with a grade of C-minus mainly due to poor growth prospects and high volatility. Alcoa has posted a negative return on equity of 8.12% over the trailing 12 months on a negative operating margin due to weak sales. Analysts expect revenue to grow by about 17% in 2010, so the tables could turn quickly, but the model is still leery of stock-price volatility. With a dividend yield of 0.9%, Alcoa is on the low end of Dow stocks and also lags behind many of competitors.
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AA $10.41 9.35%
AXP $77.30 3.88%
BAC $15.69 2.02%
BA $134.02 1.10%
HD $119.20 1.18%


Chart of I:DJI
DOW 16,776.43 +304.06 1.85%
S&P 500 1,987.05 +35.69 1.83%
NASDAQ 4,781.2640 +73.4890 1.56%

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