The famous Dow Jones Industrial Avg. will turn 126 years old in two months. Since its invention in May 1896, it has changed from a 12-stock index to one with 30 extremely successful and diversified multinational companies.
It’s also a stock index with a long history of returning money to investors who are brave enough to accept it. There are two Dow components that have a better than average chance of outperforming the market in the next eight years. With these Dow components now having the tools and intangibles needed to possibly make you 1 million dollars by 2030, investing $300,000 in them might be quite profitable.
Cloud-based customer relationship management (CRM) software solutions provider Salesforce.com is the Dow stock I am most confident of growing by 233% in the next eight years ( CRM -1.38% ). Since March 2005, Salesforce has delivered an annual return of about 26 percent to investors. To put it another way, it grows at a yearly rate of approximately 27%.
Customer relationship management software is used by organizations that serve the consumer market to boost existing customer interactions and sales. Some of the most frequent CRM use cases include managing online marketing activities, dealing with product and service concerns, and conducting predictive sales analyses. This can be particularly useful in deciding which customers would be most likely to buy a new service or product.
CRM software is created for the service sector, as you may have already guessed. In recent years, it has made progress in the healthcare, financial and industrial space. If not sooner, CRM software is anticipated to offer low double-digit yearly global growth potential until at least 2025, if not longer.
According to a study from IDC, Salesforce is the uncontested global leader in CRM spending. Salesforce has accounted for about 24 percent of worldwide CRM expenditure throughout the first half of 2021. On a combined basis, its four closest competitors didn’t even reach 20%. Salesforce is the most popular CRM software and appears set to maintain its dominance for some time.
Salesforce is a company that has made good use of organic growth. Marc Benioff, the CEO and founder, has acquired several noteworthy firms, including Tableau Software, MuleSoft, and Slack Technologies. These transactions not only broaden Salesforce’s sales channels; they also allow them to interact with a larger range of small-and-medium-sized companies interested in their ecosystem of solutions.
Benioff thinks Salesforce will see a near doubling in annual sales by mid-decade, making it the fastest-growing Dow company traders should want to invest in.
Insurance and healthcare solutions giant UnitedHealth Group ( UNH -0.08% ) can turn an investment of $300,000 into $1 million by 2030 if you hold onto your shares through the next decade. Over the last 25 years, the company has achieved an annual increase of roughly 19%. If we also include dividends, this number rises to about 20%. Every 3.6 years investors’ money has been increased on by the firm.
Even if you don’t know much about UnitedHealth Group, you’ve no doubt seen its name before. Its insurance business is probably best recognized. Although health insurance is typically a slow-growing operating model, it is extremely profitable. Insurance firms are frequently able to pass on larger premium increases to offset rising costs.
UnitedHealth’s position in the market, as well as its premium pricing power, are unaffected by the Affordable Care Act. Despite the fact that insurers must now accept individuals with a pre-existing condition, it also prompted a large number of healthier people to buy insurance.
However, the real driver of growth is its Optum healthcare services business. Optum has three divisions of its own, including data analytics, prescription refills and software, and healthcare companies. Optum has been steadily growing quicker than the insurance sector, and it consistently generates better margins as a result. The prediction on Wall Street expects UnitedHealth to increase sales from $287.6 billion during 2021 to over $497 billion by year 2026, which is quite astounding growth for a megacap firm.
UnitedHealth Group, at its current growth rate, has the potential of tripling its earnings a share by 2030 to $60 or more, which should drive shares higher.