Caterpillar Inc. (CAT), The Home Depot, Inc. (HD), McDonald’s Corporation (MCD): The Biggest Threat To The Stock Market Rally

The Home Depot, Inc. (NYSE:HD) has outpaced its top rival Lowe’s Company after Chief Executive Frank Blake in recent years unveiled several initiatives including using technology to free employees from tasks to improve customer service and made distribution more efficient. Both companies, however, have seen a boost from a recovery in the housing market. The company recently reached a 52 week high, and has strengths that can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, notable return on equity, and good cash flow from operations. The Home Depot, Inc. (NYSE:HD) was one of the few stocks that actually benefited from the recession. During the boom years, houses were going up extremely fast, and some were being built at substandard quality to make the building process move quicker. As a result, these houses needed to be repaired and maintained. Not to mention the amount of foreclosed properties sold that needed major work. As the housing market recovers, and banks continue to unload distressed properties, the repairs will continue, and so will The Home Depot, Inc. (NYSE:HD)'s profits.

McDonald's Corporation (NYSE:MCD) sales declined 1% in the first quarter, in line with analyst expectations, as the chain continues to get hurt by the global economy. In the U.S., its same-store sales were down 1.2%, but McDonald's Corporation (NYSE:MCD) said that, “despite these results,” it “outperformed the competition and increased market share” in the U.S. Even in a declining market, consumers will always buy a cheeseburger and coke, regardless of the fiscal conundrum. Investors should keep an eye on McDonald's Corporation (NYSE:MCD) and their growth initiatives, as they recently announced that they would opening chains in Russia in the coming years.

The Bottom Line

The above companies are excellent options for any value  investors looking for stocks with solid fundamentals, and a history of weathering stock market declines. Ultimately, if a company is solid from the core and has a strong management team leading the way, it will always continue it's uptrend despite the economic forecast.

The article The Biggest Threat To The Stock Market Rally originally appeared on Fool.com.

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