Scooping up shares of heavily shorted companies has been a hot investing craze this year, and the two poster children are AMC Entertainment Holdings and GameStop. These two stocks are soaring again, boosted by retail investors looking to stick it to the hedge funds. The speculators have found success for now, but both of these stocks are sure to come back down to reality at some point in the future -- there's little to support their prices besides investor excitement. If you're tempted to dabble in this kind of market excess, I urge you not to.

The opposite of meme investing is looking for a low-risk forever stock. Here's one -- and if you're worried that safety means low growth, it's more than doubled over the past five years.

A gauge is drawn on a chalkboard. The arrow is pointing to "low risk."

Image source: Getty Images.

Home is where the heart is 

With a stock price that's soared 133% since this time five years ago, and a market capitalization around $330 billion, Home Depot (HD 1.01%) is an outstanding business you'll want to add to your watch list.

The leader in home-improvement retail reported another strong quarter in its latest report, with sales rising 32.7% and net income jumping 84.6% for the period ending May 2. The pandemic was a boon for Home Depot's business -- as consumers found themselves with unexpected cash from massive government stimulus and few travel and entertainment options, they focused on renovation projects. The momentum is clearly still strong, exhibited by U.S. same-store sales (or comps) increasing 29.9% in the latest quarter.

When compared to the "meme stocks" that get much of the attention these days, Home Depot can be viewed as a sound investment. The company's return on invested capital (ROIC) of 45.1% is absolutely stellar, and it demonstrates Home Depot's financial and operating adeptness, something that will keep its dominant position in the marketplace secure.

The company's One Home Depot initiative, launched more than three years ago, underwent its first real stress test during the past 12 months. As consumers shifted toward online shopping, the investments Home Depot made to bolster its supply chain and omnichannel capabilities were on full display.

On a two-year stacked basis, digital sales skyrocketed 100% since Q1 2019. And an impressive 55% of online orders in the most recent quarter were fulfilled at a store. The business is well positioned to handle whatever comes its way. 

A booming housing market, like the one we are currently seeing, provides another powerful tailwind. Higher home prices and heightened buying and selling of houses incentivizes consumers to spend on home improvement projects. And as the U.S. slowly moves past the pandemic, people will likely reassess their living situations due to the prevalence of remote work, which supports demand for Home Depot. 

Management cited an unpredictable external environment as the reason why it didn't release a financial outlook for the rest of the fiscal year, but it remains focused on the interests of shareholders. In the first quarter, the company paid out $1.8 billion in dividends and executed $4 billion in share buybacks. 

Stick to what works 

So ignore the wild show happening with AMC, GameStop, and other meme stocks. 

The latest investing frenzy can definitely tempt those on the sidelines, but it's wiser to focus on what's worked throughout history. Owning high-quality businesses for the long term is the best wealth-building tool people have. It's a proven strategy that also has the psychological benefit of being less stressful. 

Consider Home Depot as a low-risk forever stock.