For the last 128 years, the iconic Dow Jones Industrial Average (DJINDICES: ^DJI) has served as a guide to help investors gauge the health of the U.S. stock market.
At its inception in May 1896, the Dow Jones was composed of 12 companies that, not surprisingly, were prominently tied to the industrial sector. But following more than 50 changes to this ageless index over the years, it comprises 30 diverse multinational and time-tested businesses.
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While most Dow stocks are respective leaders within their industries and have proven their worth to investors over the long run, not all 30 components are created equally. For patient investors with a long-term mindset, three Dow stocks are, through a combination of competitive advantages and price dislocations, ideally positioned to double your money by 2030.
Visa
The first time-tested Dow stock with all the tools necessary to double your money over the next six years is world-leading payment processor Visa (NYSE: V).
The biggest headwind Visa is liable to contend with between now and 2030 is the likelihood of a U.S. or global recession taking shape. When economic growth slows or contracts, it’s normal for consumers and businesses to reduce spending. That’s bad news for a company that generates revenue from transaction fees.
The flip side to this concern is that U.S. recessions have historically been short-lived. All 12 U.S. recessions since World War II ended in September 1945 have been resolved within two to 18 months. Comparatively, most economic expansions have endured for multiple years. Over time, consumer and business spending is expanding, which undeniably favors Visa’s core payment-processing operations.
Visa has an impressive international runway as well. Excluding currency movements, cross-border payment volume is growing by the low- to mid-teens on a consistent basis. This is reflective of rapidly growing emerging markets being chronically underbanked. Visa has the deep pockets and abundant operating cash flow to push into these markets organically or via acquisition.
Another saving grace…
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