Dow Leaders Outshine Market Weakness

The Dow Jones Industrial Average is often used as a benchmark for identifying solid investments. In September, three components of the Dow stand out as worth watching.

One of these is Home Depot (HD), which has fallen about 19% over the past 12 months and sits near $327. The company's business runs on housing turnover and large renovation projects, both of which have been frozen by elevated mortgage rates. However, any easing in interest rates could shift demand back toward professional customers, who make up the higher-ticket side of Home Depot's business.

Another standout is Visa (V), which trades near $379 and accounts for about 4% of the Dow. The company's strongest documented window runs from mid-December through mid-March, beating the S&P 500 by an average of 3.8% in 15 of 17 years.

Visa's business also benefits from inflation, as it takes a small cut of payment volume regardless of what consumers buy or whether the market falls. The company is also expanding its role well beyond the point of sale through technologies like Visa Direct and tokenization.

The third standout is Procter & Gamble (PG), which trades near $145 and yields roughly 3%. The company's brands include Tide, Pampers, Gillette, Crest, and Bounty -- products people buy in every economic condition. Consumer staples historically hold up better than the market during drawdowns, and P&G is the anchor of that group.