For over a century, the Dow Jones Industrial Average (DJINDICES: ^DJI) has been an emblem of Wall Street’s pulse. From its roots as a dozen-strong industrial index in 1896, it morphed into a diversified portfolio encompassing 30 historically profitable, multinational enterprises.

Conversely, the Dow’s Achilles’ heel remains its point-weighted structure, in contrast to the S&P 500’s market cap-weighted design, which grants greater influence to larger companies. In essence, the Dow prioritizes share price over market cap.

As of August, the Dow’s divisor stood at 0.15172752595384, denoting that every dollar fluctuation in share price equals a 6.59-point swing in the Dow. Beholden to this system, a company’s impact leans heavily on its share price rather than its market capitalization.

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Among the Dow’s 30 constituents, tech behemoth Apple exemplifies the price-weighted inefficiency. Standing as the second-largest traded company at a market cap of $2.9 trillion, its share price ranks 14th in the Dow. This imbalance places Apple at a position of lesser influence than Honeywell International, with a market cap just 4% the size of Apple’s.

Notably, the five Dow companies with the lowest share prices collectively hold just 3.6% of the index’s sway, while the following five stocks amass nearly 34% as of Feb. 2, 2024.

The Heavyweights

Unrivaled in its influence, health insurance and healthcare services giant UnitedHealth Group holds an 8.70% weighting in the Dow. With a share price surging above $510 as of Feb. 2, this health titan singlehandedly commands approximately 3,363 Dow points. Its enduring clout stems from robust performance in consumer-facing insurance operations, bolstered by relentless growth from its Optum subsidiary.

Then, the gargantuan Microsoft makes a mark with a 7.01% weighting in the Dow. Priced above $411 per share on Feb. 2, Microsoft wields influence amounting to roughly 2,710 Dow points. Its eminence is driven by aggressive investments in cloud infrastructure, AI, and enduring dominance in legacy segments like Windows.

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The third heaviest, global investment banking colossus Goldman Sachs, exerts a 6.61% weight in the Dow. Priced nearly at $388 per share as of Feb. 2, it commands an immense 2,556 Dow points. Endowed with a rich history, Goldman Sachs has historically leveraged recessions’ transient nature to its advantage.