These 2 Dow Stocks Are Set to Soar in 2025 and Beyond

The Dow Jones Industrial Average (DJINDICES: ^DJI) does not typically include growth stocks. Instead, it tends to encompass the market's largest stocks, with less thought given to the potential for outsize growth. Names in this group tend to be mature and relatively slow-moving businesses.

Nonetheless, a few stocks in the consumer sector have won inclusion in the index while still holding the potential for significant revenue increases. Hence, growth stock investors shouldn't automatically write off Dow 30 stocks. They might want to take an interest in the following two companies:

Amazon

Amazon (NASDAQ: AMZN) is best known for pioneering the e-commerce and cloud computing industries. Its strategic insight and ability to capitalize on its opportunities took it from an online bookseller to a retail and tech powerhouse.

However, you can argue that investors should know it for its ability to derive considerable growth despite a mammoth $2.4 trillion market cap. Companies of such size typically struggle with high-percentage growth since a mere 10% gain in Amazon implies a market cap increase of $240 billion, more than the entire market cap of most companies.

Still, that growth may make more sense if you look at the company as a collection of businesses. Its largest and oldest enterprise, online sales, is a low-margin business, and its financials imply the possibility that it is not profitable.

Instead, investors should look to the businesses supported by the sales site. Among them are its subscription business, third-party seller service, and digital advertising. The percentage growth of each of these businesses is currently in the double digits.

Hence, when the $450 billion in revenue for the first nine months of 2024 rose 11% year over year, it was not due to the online sales part of the business, which increased sales by only 5%.

Its cloud computing arm, Amazon Web Services (AWS), also showcases revenue growth in double-digit percentages. And AWS accounted for $29 billion of Amazon's $39 billion in operating income in the first nine months of the year, making it a massive profit driver and growth catalyst for the stock.

Amid the rising sales, the stock is up 55% over the last year. Despite those increases, its price-to-earnings ratio (P/E) is 49. That is above the S&P 500 average of 31, but Amazon's earnings multiple is just above multiyear lows.

So, while Amazon's size makes high-percentage growth more difficult, it shows how it can still beat the market indexes. This power should hold the stock in good stead for years to come.

Verizon

My choice of Verizon (NYSE: VZ) might take some investors by surprise. Competition from its two main rivals, AT&T and T-Mobile, has pressured the company over the years. Also, the race to keep up has left Verizon with a total debt of $151 billion, which it has struggled to reduce.

Although its annual payout of $2.71 per share offers a dividend yield of 6.4%, the $11 billion yearly cost of the payout is likely hampering debt repayment. But given the 18 straight years of annual payout hikes, the company may be reluctant to end this streak, even though AT&T ended 35 years of yearly dividend increases in 2022.

Despite this challenge, Verizon appears to be in a win-win situation. For one, even with its burdens, the stock appears to have stopped falling. Over the last year, it rose 12%, not including its dividend return.

This has occurred as Verizon's wireless and broadband business benefits from strong subscriber growth, particularly in the first three quarters of the year. And it has announced plans to buy Frontier Communications Parent, which will give it control of an extensive fiber network that will allow it to bolster its communications offerings. Verizon also regains control over the FiOS business, which it sold to Frontier a decade ago.

Moreover, it is possible that ending the dividend could actually increase returns in the long run. Investors may recall that T-Mobile is the highest-returning stock in this space, and it did not offer a dividend until last year.

As noted above, the dividend claimed $11 billion of Verizon's $19 billion in free cash flow over the trailing 12 months. If the company could apply some or all of that dividend to debt relief, the reduction in the cost of servicing its debt could increase profitability and, by extension, its share price, boosting confidence in its stock.

Lastly, its P/E has risen to 18. That has gone up in recent years, but it is close to AT&T's earnings multiple and significantly below that of T-Mobile. Assuming it can maintain the current pace of subscriber growth, the stock should continue to rise regardless of Verizon's future dividend policy.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool recommends T-Mobile US and Verizon Communications. The Motley Fool has a disclosure policy.