In February, the Dow Jones Industrial Average (^DJI) experienced a 1.6% decline. Despite several blue chip stocks suffering double-digit percentage losses, half of its 30 components outperformed the index during the month.
Coca-Cola (KO) and Verizon Communications (VZ) emerged as the leading Dow stocks in February, recording gains of 12.2% and 9.4%, respectively. These increases were driven by specific factors impacting each company.
Coca-Cola
Coca-Cola was the top Dow performer in February, largely due to robust earnings. The company reported a 6.4% year-over-year growth in fourth-quarter revenue. Organic revenue, which excludes the effects of acquisitions, divestitures, and currency fluctuations, increased by 14%. The operating margin rose from 21% to 23.5%, and earnings per share (EPS) climbed by 12%.
For the entire year, Coca-Cola achieved 3% growth in revenue and 12% growth in organic revenue. Despite a reduction in free cash flow to $4.7 billion due to tax litigation, the company announced a 5.2% increase in its quarterly dividend last month, marking its 63rd consecutive annual dividend increase. Coca-Cola’s consistent dividend growth is a major attraction for investors.
Verizon
Verizon’s strong subscriber growth in 2024 and strategic moves in artificial intelligence (AI) contributed to its stock performance in February. The telecom company introduced AI Connect, a suite of products designed to help businesses manage AI workloads, which it launched last month. Verizon foresees a total addressable market exceeding $40 billion and believes its expanding fiber and programmable network is well suited to meet the secure connectivity needs of AI data centers.
In 2024, Verizon added approximately 2.5 million postpaid mobility and broadband subscribers, increased its total wireless service revenue by 3%, generated $19.8 billion in free cash flow, and raised its dividend for the 18th consecutive year. Although Verizon anticipates slightly slower wireless service revenue growth of 2% to 2.8% and a free cash flow of $18 billion for 2025, investors continue to be optimistic about its AI initiatives and the company’s substantial dividend yield of 6.2%.
Neha Chamaria, the author of the original article, holds no positions in any of the mentioned stocks. The Motley Fool has recommended Verizon Communications, in line with its disclosure policy.
