For more than 126 years, the Dow Jones Industrial Average (^DJI 0.77%) has served as the most-watched barometer of the stock market's health. In that time, it's evolved from an industrial stock-focused index with 12 companies to one with 30 historically profitable multinational businesses, as of today.

Although all 30 of the Dow's components are mature businesses, they aren't created equally. This is to say that some represent screaming buys at today's price, while others might not be worth your hard-earned money. What follows are two Dow stocks investors can buy hand over fist right now, as well as one Dow Jones component that should be avoided like the plague.

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Dow stock No. 1 to buy hand over fist: Walt Disney

The first Dow Jones stock begging to be bought is the famed "House of Mouse," Walt Disney (DIS 0.34%).

Last week, Disney suffered its worst single-day performance in more than two decades after releasing its fourth-quarter operating results. While select metrics came in ahead of expectations, Wall Street and investors were displeased with a much larger loss from streaming service Disney+, lower average revenue per user from Disney's streaming services, and the company coming in more than $1 billion below expectations for quarterly sales.

While the company is facing tangible headwinds, such as China's ongoing zero-COVID strategy and a decline in advertising revenue as fears of a U.S. recession build, Walt Disney has clearly identifiable competitive edges that make it a smart buy right now.

As I've recently alluded, one of the strongest selling points of Walt Disney as an investment is that its user engagement can't be replicated by other businesses. For decades, the company's theme parks, movies, proprietary shows, and merchandise have brought multiple generations of friends and family together, with the common ground often involving fun and imagination. Despite being prone to the ebbs-and-flows of the U.S. and global economy, these competitive advantages don't go away.

Disney has also laid the groundwork for Disney+ to become a profitable service by 2024, according to CEO Bob Chapek. With the peak costs associated with its international rollout now in the rearview mirror, the company can focus on monetizing the more than 164 million subscribers it began with in October 2022. 

Another key reason for Disney's long-term success is the company's pricing power. The cost for an admission ticket to Disneyland in Southern California has grown 10 times faster than the actual rate of inflation since 1955.  Despite this, Chapek noted that the company's Parks, Experiences, and Products segment delivered "record" results in 2022. The point is that Disney can use its superior customer engagement to its advantage by passing along higher price points for its products and services.

Being able to scoop up shares of Walt Disney below $100 looks like a bargain.

Dow stock No. 2 to buy hand over fist: Intel

The second Dow stock that can comfortably be bought hand over fist by patient investors is semiconductor giant Intel (INTC -0.03%).

Since hitting its all-time closing high in early 2020, shares of the chipmaker have fallen 56%. This is due to a combination of Advanced Micro Devices taking some of its market share and supply chain issues over the past 2-1/2 years wreaking havoc on production and/or demand. Though far from ideal, these headwinds have present as an incredible buying opportunity for long-term investors.

To begin with, yes, AMD has been (bad pun alert) chipping away at Intel's central processing unit (CPU) share in personal computers (PCs) and data center servers. But we're not talking about Intel falling to No. 2 in either of these categories.  Even with modest market share losses, Intel holds the bulk of PC, mobile, and server CPU share, which continue to generate mammoth amounts of cash flow for the company.

Intel is also one of the direct beneficiaries of the CHIPS and Science Act, which was signed into law by President Joe Biden in August. The CHIPS Act will provide close to $53 billion to aid the domestic manufacturing of semiconductor solutions and award design grants.  Intel is in the process of building two manufacturing plants in Ohio (at a $20 billion price tag), and will likely lean on the assistance of the CHIPS Act to bolster its foundry capabilities.

Another exciting development for Intel is the recent debut of autonomous vehicle company Mobileye (MBLY 0.67%) as a public company. Intel acquired Mobileye for a little over $15 billion in 2017 and is its majority shareholder. Mobileye ended last week with a $24 billion valuation, which comes on the heels of 38% revenue growth in the third quarter and a $1.8 billion annual sales run-rate. 

It's been a very long time since Intel was this inexpensive on a fundamental basis (nearly par with its book value), and investors are going to kick themselves is they miss the opportunity to scoop up an industry leader on the cheap.

An engineer placing wires into the back of a data center server tower.

Image source: Getty Images.

The Dow Jones Industrial Average stock to avoid: IBM

But as noted, not all Dow stocks are created equally. Though it's been a low-volatility stock I've supported in the past for income-seeking investors, it's time to kick tech stock IBM (IBM 1.98%) to the curb.

To be fair, IBM has done some things right. For years, it's been broadening its niche as a key hybrid-cloud player organically and through acquisitions. Considering that the labor force has been permanently changed by the COVID-19 pandemic, demand for hybrid cloud services appears destined to grow sustainably over time. IBM's cloud revenue has, indeed, been growing by a relatively steady double-digit percentage. 

Additionally, IBM continues to reward its shareholders with a market-trouncing and inflation-fighting dividend. Paying out $6.60/share annually equates to a yield of 4.6%. Unfortunately, IBM looks more like a yield trap than a bargain.

One of the bigger issues with IBM is that its legacy operations act as cement blocks on its top-and-bottom-line figures. IBM was late to shift away from legacy hardware and software to cloud-driven services, and it's been paying the price for a decade. Total sales have been precipitously shrinking, and per-share profit has fallen from north of $14 in 2012 to what'll likely be close to $9 in earnings per share (EPS) this year.

Furthermore, IBM's share buyback program has been a waste of capital. Normally, buying back stock would reduce the outstanding share count and boost EPS for companies with steady or growing net income. Yet despite IBM retiring roughly 250 million shares since the end of 2012, its share price has declined, its EPS has fallen, and its net debt situation has worsened -- from approximately $22.1 billion in net debt a decade ago to more than $41.3 billion today. 

Although IBM's turnaround strategy marches on, investors shouldn't be waiting around for this transformation to materialize.