4 Dow Discounts for the Holidays

The stock markets are closed today but, like retail, clearance season begins tomorrow. It was a strong, if not spectacular, year for the Dow Jones Industrial Average (DJINDICES: ^DJI  ) and S&P 500 (SNPINDEX: ^GSPC  ) , which have risen 7.9% and 14.2%, respectively, so far this year. But there are some stocks that were on the naughty list, and it's time to take a look at these as potential deals for next year.

Intel (NASDAQ: INTC  ) wasn't the worst performer on the Dow this year (that title goes to HP (NYSE: HPQ  ) ), but it has lost 12.4% of its value so far this year. Fear about a declining PC market and the company's miss so far on mobile has investors worried that its best days are behind it. But a peek into the company's metrics shows a $102 billion market cap with $7.8 billion in net cash, a price-to-earnings ratio of under 10 for 2012, and a dividend yield of 4.3%. To top it off, the company has beaten estimates for nine straight quarters, and this stock is trading at a deep discount this holiday.

After gaining 35.3% in 2011 to be the Dow's top stock, McDonald's (NYSE: MCD  ) has lost 5.8% of its value in 2012 and is now on the value menu. The company is still a dominant player in fast food, and with a 17 P/E ratio, a 3.4% dividend, and earnings that are expected too rise 9% next year, the company is a good long-term bet for investors.

You may not be buying many of Procter & Gamble's (NYSE: PG  ) products as Christmas gifts, but they're probably in your shopping cart on a regular basis. P&G makes everything from Cascade dish soap to Downy, Bounty, and Luvs diapers. The stock had a modest 6.4% gain this year, but with brands like that in consumer staples, the company will be increasing its $2.25-per-share dividend for years to come.

Love it or hate it
Every holiday, there's the gift that may be a hit or may blow up in your face. This year, that's Microsoft (NASDAQ: MSFT  ) and the boom-or-bust potential of Windows 8. The company tried to make a splash with the Surface tablet, but that's been mostly a bust so far. Devices from Nokia (NYSE: NOK  ) and Samsung may help 2013 be a better year than 2012 was, and investors will either should love Microsoft's discount with a 8.5 forward P/E, 3.4% dividend yield, and $63 billion. Come next holiday season, this may be the surprise hit of the 2012 holiday season.

More great stock ideas for the holidays
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.


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