The Dow Jones Industrial Average Is in Correction Territory: 2 Historically Cheap Components That Make for No-Brainer Buys Right Now

Volatility has returned to Wall Street. As of the closing bell on March 27, the stock market's most iconic index, the Dow Jones Industrial Average (DJINDICES: ^DJI), has officially entered correction territory (down 10.01% from its all-time closing high). While the benchmark S&P 500 (SNPINDEX: ^GSPC) hasn't reached correction territory, the Dow is being kept company by the Nasdaq Composite (NASDAQINDEX: ^IXIC), which is down 12.6% from its record high.

Although Iran war uncertainty, inflation fears, and artificial intelligence (AI) bubble worries are currently getting the better of investors, history shows that double-digit percentage declines in Wall Street's major indexes are phenomenal buying opportunities for patient investors.

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Among the Dow's 30 components are two historically cheap, brand-name companies that make for no-brainer buys right now.

Visa

The first stock that makes for a genius buy amid the Dow Jones Industrial Average correction is credit-services provider Visa (NYSE: V). Since the financial crisis, shares of Visa haven't declined by more than about a third from their all-time high. They're 21% below their record high, as of March 27.

The beauty of Visa's operating model is that it's not a lender. While some of its peers double-dip on both sides of a transaction, Visa's management has kept it solely focused on payment facilitation. This choice ensures that it doesn't have to set aside capital to cover loan losses or credit delinquencies when economic uncertainty arises. It also helps Visa bounce back from downturns faster than many of its peers.

Additionally, Visa's opportunity beyond the U.S. is tantalizing. Cross-border payment volume has been growing by double-digits and shows little sign of slowing. Whether through acquisitions or organic expansion, Visa has a lengthy runway to broaden its reach into underbanked foreign markets.

Lastly, Visa is historically inexpensive. Its forward price-to-earnings (P/E) ratio of 20 represents a 25% discount to its average forward P/E over the trailing half-decade.

Image source: Getty Images.

Microsoft

The second Dow component that makes for a no-brainer buy as Wall Street's ageless index sinks 10% from its record-closing high is tech titan Microsoft (NASDAQ: MSFT). Its shares have plunged 34% below their all-time high.

One of the more overlooked foundational puzzle pieces to Microsoft's success is its legacy operations, such as Windows and Office. While these segments aren't growing like they were earlier this century, they still generate exceptionally high margins and bountiful cash flow. In other words, these segments feed Microsoft's higher-growth initiatives.

Though cloud computing has been one of Microsoft's leading catalysts for years, it's the company's incorporation of generative AI solutions and large language model capabilities into Azure that's reaccelerating sales growth for one of its highest-margin segments. In Microsoft's fiscal second quarter (ended Dec. 31), constant-currency sales growth for the world's No. 2 cloud infrastructure services platform, Azure, clocked in at 38%.

It also doesn't hurt that Microsoft is swimming in cash. It closed out December with $89.5 billion in cash, cash equivalents, and short-term investments, and is pacing more than $160 billion in net cash from operations for fiscal 2026.

Over the trailing five years, Microsoft has averaged a forward P/E of almost 30. You can buy shares right now for less than 19 times forecast earnings per share in fiscal 2027.

Sean Williams has positions in Visa. The Motley Fool has positions in and recommends Microsoft and Visa. The Motley Fool has a disclosure policy.