Most people think the Dow Jones Industrial Average contains old-fashioned companies. But that's no longer the case. Despite the name, the Dow includes companies from various sectors, and many have good growth prospects.
Here are three that look like they will reward shareholders, who won't have to show much patience to see the benefits.
Image source: Getty Images.
1. Apple
Apple (AAPL 2.20%) makes products that drive tremendous brand loyalty. Last month, CEO Tim Cook said that it has 1.8 billion active devices, up 9% from the prior year. It also generates a great deal of profitability. No wonder the company's market capitalization is nearly $3 trillion.
And that growth doesn't look to be stopping anytime soon. In its latest fiscal quarter (ended Dec. 25, 2021), revenue reached $123.9 billion, an all-time quarterly high -- and up 11% from a year ago.
And unlike some other tech companies, Apple generates a huge profit. In the last quarter, its operating profit grew by nearly 24% to $41.5 billion.
Most of its sales -- 58% in the first quarter -- come from iPhones. Fortunately, consumers continue to like the product, and the launch of the iPhone 13 last September helped propel sales upward by 9%. The continuous cycle also leads to more sales of higher-margin apps and services.
With popular products that produce enviable sales and profits, Apple is a keeper.
2. Walmart
With all the uncertainty in the world -- COVID-19 variants, high inflation, and tensions abroad -- one thing looks certain: Walmart (WMT 1.46%) will continue attracting customers.
Its low prices draw them in, particularly during difficult times. While COVID presented challenges, and retailers have had supply-chain difficulties, Walmart continues to do well.
With inflation accelerating, shoppers clamor for bargains. In its latest fiscal quarter (ended Jan. 31), the company saw same-store sales increase by 5.6%. It continues to grow profits, too. Adjusted operating income increased by 6.2% to $6 billion (and growth would have been even higher since the year-ago period includes businesses that Walmart sold).
Next year, after excluding sold businesses, management expects sales to grow 4% and operating income to increase by more than that figure. That's good growth for a company which generates over $570 billion in annual revenue.
And the company is constantly in improvement mode. After spending over $13 billion last year on categories like its supply chain, automation, and customer-facing initiatives, management will invest approximately $17 billion on these same areas in the coming year.
Such steps have allowed Walmart to hold its own against the likes of Amazon (AMZN 3.20%). In fact, the company has gained market share in the competitive grocery business. With its huge size and bargaining clout with suppliers, Walmart remains poised to continue dominating the retail market.
3. Walt Disney
The Walt Disney Company (DIS 1.94%) has shown the benefits of having strong content. Even during the pandemic, its Disney+ streaming service picked up the slack. When the company launched it in fiscal 2020, the number of paid subscribers soared to 73.7 million and then to 118.1 million last year.
As restrictions eased, Disney's empire -- including its theme parks, cable and network channels, and movie studios -- got back on its feet. In its most recent quarter, which ended on Jan. 1, revenue grew by 34%.
Although one part of its business can pick up for one that's lagging, Disney does best when it's firing on all cylinders as it is now. That's because management knows how to leverage movies, television shows, theme parks, merchandising, and streaming services.
Founded nearly 100 years ago, it continues to move forward as evidenced by the company's purchase of Twentieth Century a couple of years ago to expand quality content. With enviable media properties, Disney's stock should reward investors.
These three Dow stocks have proven their mettle and are leaders in their respective industries. Apple has built brand loyalty with stylish, high-quality products. Walmart, the largest retailer, has perfected keeping costs down and charging low prices. And Disney has grown into a media empire.
With such advantages, these are companies you want to own -- and I don't think you'll have to wait long to see gains.
