24/7 Wall St.: 2010 Becomes The Year of the Conglomerates

2010 may be a directionless year for the stock markets so far, but shares of conglomerates are outperforming and more upside is expected. The five largest conglomerates we follow are all higher for the year. We took a look at General Electric Co. (NYSE: GE), 3M Co. (NYSE: MMM), Honeywell International Inc. (NYSE: HON), United Technologies Corp. (NYSE: UTX) and Berkshire Hathaway Inc. (NYSE: BRK-A) to see which conglomerates were outperforming and why. With a mixed bag between the performance of the SPDRs (NYSE: SPY) and DIAMONDS (NYSE: DIA), the performance so far stands out significantly for all of these large companies.
Conglomerates are supposed to offer safety because of their diversification. That is the theory, and the theory seems to be working so far in 2010. They are also generally good for screens when it comes to value investors and dividend investors. We put together a small table here for comparison of the stocks and the performance. If there are any discrepancies over the “listed” December 31, 2010 versus the papers on official closes, it is because the figures below have accounted for the dividend effects in the stocks. We have also shown the year-to-date gains up to the close of Thursday, July 29, 2010 and we even gave an implied upside target to the consensus analyst price objective in the shares.

Read more: 2010 Becomes The Year of the Conglomerates (GE, MMM, HON, UTX, BRK-A, SPY, DIA)