There's a strong case to be made that too much attention is given to the Dow Jones Industrial Average. After all, the index includes only 30 stocks. And those stocks don't fully reflect the diversity of the overall economy.
But people pay attention when they hear that the Dow has fallen by more than 1,000 points -- as it did twice this month. Most stocks in the index are indeed performing dismally.
Not all of them, though. These three Dow stocks are crushing it in 2022.
You probably won't be surprised in the least that the only remaining oil stock in the Dow happens to be the best-performing stock in the index. Shares of Chevron (CVX 1.71%) have skyrocketed more than 45% year to date.
There are multiple factors behind Chevron's tremendous gains. Russia's invasion of Ukraine disrupted global oil and gas markets. Supply was already low due to production shutdowns resulting from the COVID-19 pandemic. As demand for oil and gas picked up after travel began returning to normal, higher prices were a natural result.
It never hurts when Warren Buffett loads up on a stock, either. That's exactly what the legendary investor has done, adding enough to Berkshire Hathaway's position in Chevron in the first quarter to make it Berkshire's third-largest holding.
Merck (MRK 0.91%) stock floundered in 2020 and 2021. However, it's a much different story so far this year. Shares of the drugmaker have jumped more than 20%.
Institutional investors scooped up shares of Merck in a major way during the first quarter. Big pharma stocks often perform well when the overall stock market is down because they're viewed as safe-havens.
Merck has looked especially attractive with the continued strength of its cancer immunotherapy Keytruda. The company also has enjoyed an extra sales boost from its COVID-19 pill Lagevrio (molnupiravir).
The Dow is falling, but Dow (DOW 1.39%) isn't. The latter is the giant chemical company that shares a name with the index in which it's a component. However, there is no other connection between the two. And shares of Dow the company are sizzling, with a year-to-date gain of close to 20%.
Dow's underlying business strength continues to attract investors. The company reported impressive 28% year-over-year net revenue growth in the first quarter of 2022. All of its operating segments, businesses, and regions delivered solid gains.
Investors also like Dow's dividend. The company's dividend yield currently tops 4%. Dow has paid a dividend for 442 consecutive quarters, a streak that began way back in 1912.
Are they buys now?
My view is that Chevron, Merck, and Dow are pretty good picks right now. Each stock has shown that it can perform well during a challenging time for the overall stock market. All three companies pay attractive dividends that income investors should especially like.
Over the longer term, I don't look for any of these stocks to deliver the kinds of gains we've seen so far in 2022 -- at least not on a regular basis. However, for the current market climate, Chevron, Merck, and Dow are exactly the kinds of stocks that should flourish.