Starting with a review of the price-to-book ratios we will compare the six stocks. The P/B is critical to value investing. The underlying value of the company in terms of it's break-up or liquidation is what sets an investors downside protection. You can clearly see that if our decision were based solely on the P/B CAT would be cut and even XOM might be questionable for me.

• American International Group (NYSE: AIG): P/B (TTM) 1.96
• Alcoa Aluminum (NYSE: AA): P/B (TTM) 2.35
• Disney (Walt) Company (NYSE: DIS): P/B (TTM) 2.36
• Home Depot (NYSE: HD): P/B (TTM) 2.96
• Exxon Mobil (NYSE: XOM): P/B (TTM) 3.98
• Caterpillar Inc. (NYSE: CAT): P/B (TTM) 5.78

The next figure I look at in my screen along side the P/B is the price-to-sales. As any honest CEO or CFO will tell you they can massage the P/E to "make their quarterly numbers" if they have to, but the top line is harder to play with. This is the reason that is most often given for the reliability of the P/S over the P/E in predicting share appreciation over time. All six stocks represent very good value from a P/S perspective and you will notice CAT is in the top half. Using trailing numbers, one does need to watch market trends as best you can.

• Home Depot (NYSE: HD): P/S (TTM) 0.87
• Alcoa Aluminum (NYSE: AA): P/S (TTM) 1.18
• Caterpillar Inc. (NYSE: CAT): P/S (TTM) 1.25
• Exxon Mobil (NYSE: XOM): P/S (TTM) 1.49
• American International Group (NYSE: AIG): P/S (TTM) 1.65
• Disney (Walt) Company (NYSE: DIS): P/S (TTM) 2.18

Time to look at dividend yields, another factor that has historically been a major element in long term returns and identifying value. Along with the P/B, and P/S it is what I use in my preliminary reviews for myself. Interestingly, only Home Depot offers a dividend higher than the S&P 500 average and when it comes to the Dow it is at the mean. If I was to make any decision at this point in the top half of all three initial criteria, Alcoa and Home Depot would not be hard to pick. Exxon Mobil has been criticized often for not paying a greater dividend yield but among these stocks it does not look so bad.

• Home Depot (NYSE: HD): Yield 2.32%
• Exxon Mobil (NYSE: XOM): Yield (TTM) 1.68
• Alcoa Aluminum (NYSE: AA): Yield 1.65%
• Caterpillar Inc. (NYSE: CAT): Yield 1.53%
• American International Group (NYSE: AIG): Yield 1.11%
• Disney (Walt) Company (NYSE: DIS): Yield 0.87

Looking at long-term-debt to equity only Caterpillar has any debt worth discussing, with a long-term debt-to-equity ratio of 4.0 (TTM). The others have little or close to none. The next metric we will review is the price-to-cashflow, P/CF. This is another aspect Warren Buffett has made a big deal of over the years: cash-flow. In his case he is able to take advantage of companies with a large float so he can invest it increasing his shareholders equity over time.

• Alcoa Aluminum (NYSE: AA): P/CF (TTM) 9.1
• Exxon Mobil (NYSE: XOM): P/CF (TTM) 9.38
• Caterpillar Inc. (NYSE: CAT): P/CF (TTM) 9.68
• Home Depot (NYSE: HD): P/CF (TTM) 10.47
• American International Group (NYSE: AIG): P/CF (TTM) 10.91
• Disney (Walt) Company (NYSE: DIS): P/CF (TTM) 11.57

At this point it's time to make some decisions. First of all, all six of these stocks have something to offer and I would venture to say that the six together form a diversified portfolio that I think would beat the Dow overall in the near to mid-term horizon. In the short run, anything can happen.

I'm giving Alcoa the nod and putting it at the top of the Dow for value. Every which way you look at it there is value. It certainly makes it clear why the aluminum companies have all been in play, with merger and acquisition chatter in the news for the past year to eighteen months.

I am also going to pick Home Depot, which has been one of the worst performers in the Dow. But as you can see from the metrics, it is among the strongest candidates going forward. Having the lowest P/S and highest dividend yield are important and it has faced the biggest head wind with housing down drastically. It also has the most deceiving book value, and like Alcoa is a potential takeover target. While patience might still be required to buy this stock, it does seem like most of the bad news has been known for quite some time. With almost no debt and many valuable real estate assets it could be acquired at a 20% premium and leveraged 20% to 25% still able to cover the acquisition price and new debt with it's huge cashflow. It seems to me that some of the large commercial REITS should be looking at this. Some properties in urban areas could be redeveloped as large mixed use projects, adding tremendous value to the portfolio.

Disney will be the first one cut from the list. It has the lowest yield and highest P/CF as well as other issues. One concern I have with Disney having more to do with its business than its metrics is that while I can see Alcoa expanding its sales and margins with the global economy, I do not see Disney producing 35% more films or television shows; building 35% more theme parks; or increasing margins in the forseeable future -- Alcoa and Home Depot are in, Disney is out.

Looking at return-on-equity these companies are stellar performers. Although the rates very greatly all of them were higher than the P/E ratios.

• Caterpillar Inc. (NYSE: CAT): ROE (TTM) 42.8
• Exxon Mobil (NYSE: XOM): ROE (TTM) 35.16
• American International Group (NYSE: AIG): ROE (TTM) 15.66

This process becomes increasingly subjective at some point because these are all such great companies that it is a fools game to pick between them, but alas I will play the fool. I have written many stories recently about how under valued the insurance companies are and that has been highlighted again in this story, but given that AIG has been at the bottom of most metrics in this review, it will be cut here. It is a great company and a great stock but it is not in my top three Dow picks for value.

Examining insider trading there is not much to report. None of the companies had much buying activity and a lot of trades are options related. The most common figure referenced by analysts is the P/E ratio. Does that indicate anything? Not much. The two remaining stocks have P/E's below the Dow average and the S&P average. What about profit margins?

• Exxon Mobil (NYSE: XOM): P/E (TTM) 12.26 and profits margins of 11.79%
• Caterpillar Inc. (NYSE: CAT): P/E (TTM) 15.0 and profits margins of 8.52%

Those of you who are new to BloggingStocks can check out my other stories Chasing Value Update 2: doing well with WFC, APC, ACH, AAUK, CX, and LR, and read Chasing Value or Serious Money to find more potential opportunities and verify my track record as well.