Dow Jones Stocks Down Over 20%, But Still Attractive

The two Dow Jones Industrial Average stocks that have dropped over 20% from their highs are Home Depot and McDonald's. Despite the decline, both companies still offer attractive investment opportunities.

Home Depot is the largest home improvement retailer in the US, with a market share of just 15% in a $1.1 trillion industry. The company has faced challenges due to the weak housing market, but its competitive position remains strong. Home Depot operates over 2,300 warehouse stores and 1,300 SRS Distribution branches, generating $169 billion in revenue last year.

The stock's value is best seen in the dividend, which yields 2.84% based on its quarterly payment of $2.33 per share. The company has a history of maintaining and growing its dividend, with an annualized growth rate of 6.6% over the past three years.

McDonald's is another Dow Jones stock that has dropped significantly from its highs, trading at a price-to-earnings multiple of 20. Despite execution issues and a cautious consumer, the company still generates high-margin rents and royalties from its franchise model. McDonald's pays an annualized dividend of $7.48 per share, or about 60% of earnings.