2 Winning Stocks You Can't Afford to Ignore

Stocks finished mixed on Tuesday, as investors stayed generally upbeat about the prospects for an economic recovery. The Dow Jones Industrial Average (^DJI 0.06%) showed the biggest gains, with the S&P 500 (^GSPC -0.22%) lagging behind and the Nasdaq Composite (^IXIC -0.52%) actually losing a modest amount of ground on the day.

Data source: Yahoo! Finance.

Helping to boost the Dow were shares of Home Depot (HD 0.02%), as the home improvement retailer announced solid earnings results for its most recent quarter. Beyond the Dow, though, BHP Group (BHP -0.72%) confirmed the strength of the natural resources arena, as the materials producer posted excellent numbers. Let's look at both companies.

Heading for home

Shares of Home Depot finished the day up more than 4%. The company's second-quarter results showed continued interest from consumers despite the economic pressures that they're facing.

Home Depot's fundamental numbers indicated ongoing growth. Revenue was up 6.5% to $43.8 billion, as comparable sales for the quarter rose 5.8% systemwide and 5.4% in U.S. stores. Earnings climbed nearly 12% year over year to $5.05 per share. Both numbers represented new all-time records for the home improvement retailer.

Home Depot also expects the remainder of 2022 to go well. The company reaffirmed its past guidance, expecting overall sales growth of roughly 3% from 2021 levels. Earnings growth is likely to slow to mid-single-digit percentages, but CEO Ted Decker remained confident that the Home Depot team will continue to serve its customers well and handle the fast-changing economic environment.

Even after the gains, Home Depot remains more than 20% below its all-time record highs. With a reasonable valuation and good growth prospects, the home improvement retail stock could have some room to run higher.

BHP looks golden

Meanwhile, shares of BHP Group were up nearly 6% at the end of the trading session on Tuesday. Investors liked what they saw in the materials specialist's full-year fiscal 2022 results.

A quick glance at the numbers is all it takes to see the improvement in BHP's business. Profit from continuing operations climbed 34% year over year, resulting in a 25% rise in basic earnings per share. Free cash flow came in at a record $24.3 billion, and the company successfully reduced its debt and announced a record-breaking dividend that totaled $3.25 per share for the year.

BHP has been going through some structural changes as well. The company merged its petroleum business with the oil unit of Woodside Energy Group, which led to a one-time gain that helped offset losses from a dam failure and COVID-19 impacts. Despite rising unit costs for its mining operations, higher coal and copper prices and record sales from several of its properties helped produce strong performance overall.

BHP has high hopes for most of its commodities markets, predicting ongoing strength for steel, metallurgical coal, copper, and iron ore. Moreover, with the Russian invasion of Ukraine disrupting world markets for potash, prices have risen to historic highs, and that should help to bolster that part of BHP's business for the foreseeable future. The numbers from BHP suggest that other mining and materials companies are likely to follow suit with good financial results as well.