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The Home Depot, Inc. (HD), McCormick & Company, Incorporated (MKC): These Stocks Could Lead You to a Lifetime of Market-Beating Returns

The Home Depot, Inc. (NYSE:HD)Yesterday I had the good fortune to join Barry Armstrong on his radio show Financial Exchange on WRKO AM 680 in Boston. Every so often we get to talk stocks for a few minutes, and yesterday I gave him and the listeners of Boston two stock ideas that I think are solid buys today. You can catch our segment by clicking here. And you can read more about them below.

The Home Depot, Inc. (NYSE:HD)
This is one of the most obvious plays on the recovering (yes, I know it’s slow) housing market. One of the first questions I get when talking up The Home Depot, Inc. (NYSE:HD)’s game is “Why not Lowe’s ?” A fair question, no doubt, but when I look at the two side to side, the answer to me is obvious. The Home Depot, Inc. (NYSE:HD)’s scale simply makes it more profitable:

Metric Home Depot Lowe’s Companies, Inc. (NYSE:LOW)
Market capitalization $116,863 $47,916
Revenue $76,070 $50,456
Net income $4,726 $1,972
Gross margin 34.6% 34.3%
Operating margin 10.9% 7.3%
Net margin 6.2% 3.9%
Dividend yield 2% 1.6%

Source: S&P Capital IQ. Dollar amounts in millions.

Data from Freddie Mac’s most recent quarter tells us that as rates start ticking back up, the refinance boom is slowing down. And after all of this refinancing, I think many folks are going to be staying in their homes for a while. This means projects and renovations abound, and The Home Depot, Inc. (NYSE:HD) is one of the best ways for Foolish investors to play this trend.

McCormick & Company, Incorporated (NYSE:MKC)
I still gush about my trip to the McCormick & Company, Incorporated (NYSE:MKC) spice factory in Hunt Valley, Md. As someone who cooks a decent bit, it was just really cool to see how the operation works. It’s more than just “spices”; it’s science. They have labs where they perform research and try new things; it was just really cool. But I’m not picking this stock with my heart. Nope, I also love the fact that McCormick has a spot in virtually every pantry in the country. Open yours up, I bet you have a McCormick & Company, Incorporated (NYSE:MKC) product in there. And it’s this ubiquitous presence that has helped McCormick grow sales at a 7% annualized clip over the past five years.

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