In case you haven’t heard, the Dow Jones Industrial Average waltzed to a record high March 5, crushing the old high of 14,164.53 hit on Oct 9, 2007. Leading the Dow’s historic dance were The Home Depot, Inc. (NYSE:HD), International Business Machines Corp. (NYSE:IBM) and McDonald’s Corporation (NYSE:MCD), up 108%, 75% and 67% respectively since the October 2007 peak.
The three have little in common except that they represent stocks that tend to hold up in both good times and bad. Here’s why the trio warrants a place in your portfolio.
The Home Depot, Inc. (NYSE:HD) is the world’s largest home improvement retailer. The company benefited from the slump in the housing market during the economic downturn when homeowners spent money on sprucing up their home’s interior and exterior as they found themselves spending more time around the house and less time eating out or on vacations. Currently, Home Depot is benefiting from the rebound in the economy and the improving housing market.
The company is a giant, sporting a market cap of 105.77 billion. Its P/E is a reasonable 23.56. Fourth quarter earnings were 68 cents a share, up from 50 cents in the same quarter a year ago. Guidance for the full year is EPS of a healthy $3.57.
Home Depot’s board just authorized a $17 billion share repurchase program and declared a 34% increase in its quarterly dividend to 39 cents per share.
Business is expected to remain brisk as clean-up from Superstorm Sandy continues and housing rebounds.
International Business Machines Corp. (IBM), a multinational technology and consulting company, manufactures and markets a bevy of tech components from hardware to software. It also offers infrastructure, hosting and consulting services. The firm is an unrivaled pioneer in its industry.
The Armonk, N.Y. based company has held the record for the company generating the most patents for 20 years. This innovative tech behemoth has moved swiftly and successfully into cloud computing. Cloud, the next big thing that is already here, streamlines how software, business processes and services are accessed. This explosive technology helps businesses scale operations and optimize investments. More and more companies are finding cloud services at lower costs, making for more efficient business models and growing profits.
A favorite of Berkshire Hathaway Inc. (NYSE:BRK.B)’s Chairman Warren Buffett since 2011, the investment guru continues to add to his position. International Business Machines Corp. (IBM) now accounts for 18.6% of Buffett’s portfolio.