Dow Jones Stocks Home Depot and McDonald's Plunge Over 20%

The Dow Jones Industrial Average is often used as a benchmark to identify solid investments. Two companies that have caught my attention are Home Depot (NYSE: HD) and McDonald's (NYSE: MCD). Both stocks have dropped over 20% from their highs, which has increased their dividend yields.

Home Depot, the leading home improvement retailer, is trading at a 25% discount to its 2024 all-time high of $431 per share. The sluggish housing market has weighed on sales, but the company's competitive position remains strong. With over 2,300 warehouse stores and more than 1,300 SRS Distribution branches, Home Depot would be difficult to replicate.

The addressable market for home improvement is a massive $1.1 trillion, with Home Depot controlling only 15%. This leaves room for long-term growth. The company's dividend has risen at an annualized rate of 6.6% over the past three years and currently yields 2.84%, based on its quarterly payment.

McDonald's is another Dow Jones member that has seen its stock price drop 24% from its prior high of $341 per share. The company has raised its dividend for nearly 50 years and currently yields 2.82%, based on the current $1.86 quarterly payment. McDonald's highly profitable franchise model generates a large share of revenue from rents and royalties rather than food sales.