Two Dow Jones movers and shakers who can shine in 2025
The Dow Jones Industrial Average is one of the most followed indices in the financial markets, containing 30 stable and profitable companies. These companies boast not only an exceptional history of growth and profit generation, but also a strong reputation among investors.
While it is possible to invest in the index as a whole through funds, more adventurous investors can achieve interesting returns by selecting individual stocks. Two companies that could be great choices this year are Coca-Cola a Home Depot.
Coca-Cola: A stable giant with the potential to return to growth
Coca-Cola $KO has long been a symbol of stability and resilience, and the company's recent results have shown positive trends. Organic sales grew 9% in the third quarter, and the company expects to achieve growth of up to 10% for the full year 2024. This is near the upper end of its long-term targets. In addition, the company increased profitability and generated ample free cash flow.
Although growth has been driven primarily by price increases recently, the key will be whether Coca-Cola can restore sales volume growth in key markets such as the US in 2025. If so, the company's stock may stop underperforming the market.
However, long-term investors can remain calm during the transition period. Popular brands such as Powerade, Fuze Tea and Topo Chico have strong potential in the sports and sparkling beverage space. Add to that an attractive dividend that currently yields over 3%, and you have a solid reason to add Coca-Cola to your portfolio.
Home Depot: Opportunity in tough times
Home Depot $HD, a leader in DIY retail, experienced a challenging 2024 due to weakness in the housing and home improvement market. Yet it's situations like this that can present opportunities for investors to take advantage of temporary weakness. Incidentally, legendary investor Warren Buffett often says that the best time to buy a great company is when it faces short-term challenges.
Despite a 2.5% decline in sales for 2024, Home Depot maintained its market leadership and outperformed its rival Lowe's in sales growth and profit margins. The company is showing a high return on invested capital, making it an attractive option for long-term investors.
A key indicator of recovery will be a return to customer traffic growth, which fell 1% last year. If there is a turnaround in the housing sector, Home Depot could be one of the major winners. Meanwhile, the company continues to repurchase shares and grow its dividend, providing a steady yield for investors.
Disclaimer: There is plenty of inspiration to be found on Bulios, but stock selection and portfolio construction is up to you, so always do a thorough analysis of your own.
Source: fool.com
