Dow Jones said Monday that it has replaced General Motors (GM) and Citigroup (C) in its flagship Dow Jones Industrial Average index with Travelers (TRV) and Cisco (CSCO).
The removal of GM and Citi from the Dow 30 was not unexpected, as the two companies have seen their share prices erode more than 90% since 2007. GM officially filed for bankruptcy protection Monday, while Citigroup has required more than $93 billion in government funds to stay afloat.
The two additions to the benchmark Dow 30 index were somewhat of a surprise, however. Many Wall Street analysts speculated about sexier picks such as Google (GOOG), Amazon (AMZN), or Apple (AAPL) being thrown in the mix, although such companies have relatively high share prices that could make them less attractive for Dow Jones.
Dow Jones said that it has no real rules about adding or removing companies from its index.
Cisco shares rose 73 cents, or +4%, while Travelers shares rose $1.70, or +4.2%, in morning trading Monday following their inclusion in the DJIA.
The Bottom Line
None of the stocks mentioned above are currently on our ''Recommended'' list. Cisco does not pay a dividend and the only name that we would potentially consider is Travelers, which was recommended at one point.
Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.
Tom Reese/Paul Rubillo, Dividend.com
