The Dow's 4 Best Stocks Since the Bull Market Began

Many investors use New Year's to look back at the past year, but a long-term mindset can be more helpful. Find out which stocks have contributed the most to the Dow's bull-market run since 2009.

Jan 1, 2014 at 11:01AM

Since March 9, 2009, the Dow Jones Industrials (DJINDICES:^DJI) have climbed more than 10,000 points, jumping more than 150% from what turned out to be the low-water mark of the financial crisis. Yet while all 30 of the Dow's current members have gained ground since then, some stocks have definitely made a stronger contribution toward the Dow's gains than others. As 2014 begins, let's take a closer look at American Express (NYSE:AXP), Walt Disney (NYSE:DIS), Home Depot (NYSE:HD), and Boeing (NYSE:BA) to see how they recovered so strongly from the market meltdown.

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Source: Wikimedia Commons.

Financial Armageddon averted
The 818% gains that American Express has enjoyed since 2009 came as a result of the major damage to the card giant during the financial crisis. With default rates throughout the industry skyrocketing, AmEx even took the aggressive step of offering certain cardholders $300 to pay off their balances and close their accounts in an attempt to reduce its risk levels in its card portfolio.

After enduring tough times, though, AmEx recovered along with most of its credit card-issuing peers. With its traditional focus on affluent customers, AmEx benefited from the same spending trends that helped luxury retailers outperform their mainstream counterparts. Yet growth initiatives like its Bluebird prepaid card aimed to broaden AmEx's customer base and provide growth even as regulatory impediments became more common. With Warren Buffett still hanging onto his long-term holding in the stock, AmEx still has plenty of growth potential ahead.

The rise of entertainment
For Disney, a 423% rise came amid great uncertainty about the media giant's overall strategy. At the depths of the financial crisis, some questioned whether Disney's hodge-podge of properties, including everything from theme parks and cruise ships to movie and television content, could gel together to find the synergies that could drive overall profits higher.

Yet the economy did recover, and with it, Disney's full value became evident. The recovery brought more spending to theme parks and travel destinations, but the real measure of Disney's success came from the rise of its blockbuster entertainment franchises, driven largely by the acquisitions of Pixar and Marvel. More recently, lucrative content deals have justified the prices Disney paid in those buyouts, and the strength of its ABC and ESPN networks only bolster the company's overall future potential.

Housing rebuilt
The prime cause of the financial crisis was the housing bust, and Home Depot found itself at the epicenter of the crisis as a result of its home-improvement focus. With millions of homeowners severely underwater on their mortgages, few had the economic ability or the impetus to put good money toward renovation or remodeling projects. That put Home Depot's growth at risk.

Yet Home Depot started its 417% climb even before housing recovered, recognizing the need to make itself attractive not just to building professionals but also to do-it-yourselfers learning to make do with the homes they were stuck in rather than trying to trade up in an illiquid housing market. By the time housing did recover, Home Depot was firing on all cylinders, outperforming its rivals and tapping into the strength of both ends of its target audience.

Flying higher
Boeing is up 395% since early 2009, and it owes much of its success to improving economic conditions in the airline sector. During the crisis, travel declines dramatically, and airlines sputtered as they tried to stay afloat. Investors feared that Boeing's business could suffer from potential cancelled orders or other fallout from the crisis.

Since then, airlines became profitable by charging lucrative ancillary fees, and the drive to cut costs led them to want renovated aircraft that were more fuel efficient than their aging fleets. That in turn fed order flow to Boeing, leading to the development of new and upgraded models designed to deliver the increased performance that its customers wanted. With trillions in potential demand over the next two decades, Boeing has plenty of room to grow.

Charge!
There's no guarantee that the Dow will continue to rise in 2014, but the gains that these stocks have put in since early 2009 are unquestionably impressive. Each of them still has the potential to climb further if conditions stay favorable for them and their respective industries.

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Fool contributor Dan Caplinger owns shares of Walt Disney. You can follow him on Twitter: @DanCaplinger. The Motley Fool recommends American Express, Home Depot, and Walt Disney and owns shares of Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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