- CNBC's Jim Cramer says the top 10 performing Dow stocks of 2019 "are most emblematic of the upside potential in 2020, as long as the current environment persists, which is exactly what I'm expecting."
- The "Mad Money" host breaks down the top Dow stocks of the year and gives his outlook for the year to come.
The Dow, alongside the other two major indexes, surged double digits in the banner year of 2019. The 30-stock index of blue-chip companies gained 22.3% to close the year at 28,538.44.
"There aren't enough large capitalization stocks with good growth, bountiful dividends, and big buybacks that really benefit from a stronger global economy," the "Mad Money" host said. "Many of those stocks are in the Dow, and I think these 10 are most emblematic of the upside potential in 2020 as long as the current environment persists, which is exactly what I'm expecting."
Apple — climbed 86% to $293.65
Apple in early 2019 cut its forecast, and the news sent its stock down almost 10%. The stock bottomed at $142 and traded up more than 151 points by the end of the year as the company placed more emphasis on its subscription businesses, along with releasing its latest iPhone and AirPods products.
Cramer is convinced the stock can keep climbing in 2019, repeating his oft-used phrase: "Own it, don't trade it."
"When this stock runs up going into the quarter, sometimes it makes sense to wait for a pullback, but otherwise please don't overthink this one," he said.
Microsoft — rallied 55% to $157.70
Cramer flagged that Microsoft shares — trading for 26 times 2021's earnings estimates — could be deemed expensive for some investors, but not for those making a bet on the software giant's growing Azure cloud platform.
"Microsoft's become the preeminent senior-growth stock of this era," Cramer said. "I bet it stays that way."
J.P. Morgan Chase — gained 43% to $139.40
The rally in the banking sector, including J.P. Morgan, was fueled in large part by the Federal Reserve's move to cut interest rates three times. Additionally, the White House's move to cut red tape benefited the industry, Cramer pointed out.
"J.P. Morgan's got a ton of consistent growth, and this whole industry thrives on the Trump administration's light-handed approach to regulation," he said. "Of course, depending on how the election unfolds, this group's prospects could start to look very different."
Visa — surged 42% to $187.90
Cramer endorsed Visa as a "fantastic" play on the transition from dollars to digital.
"Both Visa and Mastercard have nice, predictable growth because so much of the world still uses paper," he said. "Plus, if Visa gets a real chance to operate in China the stock could have a lot more upside."
United Technologies — moved nearly 41% to $149.76
United Technologies made gains in 2019 on its merger with Raytheon.
"There's a real scarcity of high-quality industrials that are worth owning here," Cramer said. "United Technologies is one of them."
Goldman Sachs — jumped 38% to $229.93
Despite facing challenges from the 1Malaysia Development Berhad, or 1MDB, scandal, Goldman Sachs shares were able to bounce in 2019 because the stock had fallen too low and the longtime investment bank has zeroed in on consumer banking, Cramer said.
"The stock can't stay this cheap, though, given how much money it can make in an improving global economy," he said. "If Goldman gets out of this Malaysian malaise for less than $5 billion ... that's a win."
Nike — gained 37% to $101.31
Nike expanded business in China in 2019, despite escalating tensions between Washington and Beijing throughout the year. The iconic sports apparel brand could have more upside in 2020, Cramer predicts.
"Lately, Nike's become more of a tech company," which "makes perfect sense to me that John Donahoe, formerly of ServiceNow, is the new CEO," the host said. "I think this stock can go higher."
Procter & Gamble — rallied 36% to $124.90
Cramer declared Procter & Gamble "is back" after becoming more accountable and regaining share in emerging markets. He thinks the stock has more upside because the company "has been floundering for years. It only just started to play catch-up."
Disney — up 32% to $124.90
American Express — gained 31% to $124.49
Cramer said the stock is still low, considering the amount of potential business it can begin doing in China on the phase one trade deal.
"The stock simply isn't that expensive, especially if the global economy shifts back into growth mode, as I think it will," he said.
Disclosure: Cramer's charitable trust owns shares of Apple, Disney, Goldman Sachs, J.P. Morgan and Microsoft.