Johnson & Johnson

Perhaps the biggest headwind facing J&J is the overhang from talc-based baby powder lawsuits. Johnson & Johnson had attempted to create a subsidiary to absorb the liabilities associated with these lawsuits. The plan was then to have this subsidiary seek bankruptcy protection. However, a U.S. appeals court rejected that proposal in late January.

The other "problem," if you want to call it that, is that J&J is a mature (i.e., relatively slow-growing) company and has been passed over by investors wanting outsized returns. With the Nasdaq Composite rocketing out of the gate for the first five weeks of 2023, J&J became a victim of sector rotation.

But among the three historically cheap Dow stocks on this list, J&J arguably has the most rock-solid bounce thesis.

To begin with, it is a structurally sound company. It's one of only two publicly traded companies with the highest possible credit rating (AAA) from Standard & Poor's, a division of S&P Global, and is on track to increase its dividend for a 61st consecutive year next month. On a nominal-dollar basis, J&J's payout is one of the largest in the world.

J&J's operating model is also a well-oiled machine. For more than a decade, the percentage of net sales derived from pharmaceuticals has been climbing. Brand-name drugs offer high margins and faster sales growth rates when compared to medical devices and consumer health products.

But there's balance here. Because brand-name therapeutics have a finite period of sales exclusivity, J&J is constantly reinvesting in its drug development platform and can rely on its medical technologies segment to pick up the slack as the U.S. and global populations age.

In other words, Johnson & Johnson is about as safe of an investment as you'll find in the Dow -- and it's cheaper now than at any point in over a decade.