Intel (INTC) tops the list of the worst Dow Jones Industrial Average stocks through Q3, a quarter in which the chipmaking giant announced 15,000 layoffs and became a subject of takeover talk. Other Dow Jones bottom-dwellers this year include Boeing (BA), Nike (NKE) and Chevron (CVX).
Through Friday’s close, Honeywell International (HON) ranked No. 26 among the Dow 30, though Dow Inc. (DOW) was nipping at its heels for the last spot in the bottom five.
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What’s Ailing These Dow Jones Stocks?
There are a few common threads among this year’s crop of Dow losers. Both Boeing and Nike have replaced their CEOs in a bid to restore confidence, bringing in retired industry veterans. Boeing brought in outsider Robert Kelly Ortberg after a string of in-flight mechanical issues undermined faith in the company’s commitment to safety. Nike is bringing back longtime company vet Elliott Hill to reestablish its reputation as an innovative brand after losing a step — and market share — to competitors.
A shortage of cash has weighed down both Intel and Boeing, with both expected to raise funds, diluting current shareholders’ share value, in the near term.
One investor worry over Intel is that it will get kicked out of the Dow 30, adding to selling pressure. Northland gave Intel a $42 per-share sum-of-the-parts valuation, but said it will “need to be split into pieces.”
Boeing needs to safely ramp up production of 737 and 787 deliveries. But first it needs to settle a strike by 33,000 machinists, who have snubbed a 30% wage increase over pension issues.
China’s economy has been a big issue for Nike and Chevron. Citi noted on Sept. 10 that a key Chinese wholesale partner of Nike had issued a profit warning. Meanwhile, Chinese oil imports have trended lower this year, which may be due both to sluggish overall growth and its booming market for electric vehicles and hybrids.
That’s part of an iffy supply picture as OPEC+ countries look to unwind production cuts later this year.
Chevron’s stalled acquisition of Hess (HES), which is being challenged by ExxonMobil (XOM), also has hung over the stock.
Dogs Of The Dow Dividend Yields
There is a Dogs of The Dow investment strategy that’s focused on the Dow Jones stocks that are beaten down so much that they offer an inviting dividend yield.
However, that’s not always the case. Boeing and Intel, which both need to raise capital, are in no position to offer a hefty dividend yield. Nike still doesn’t qualify as a dividend play.
However, Chevron offered a 4.5% dividend yield as of Friday, according to the Dogs of the Dow website. Dow Inc. has a 5.1% yield. The biggest yield, 6%, is offered by Verizon.
Honeywell doesn’t rate near the top, but it just boosted its dividend 20 cents to $4.52 per share, effective Dec. 6. That’s a vote of confidence in its future opportunities around three megatrends: automation, the future of aviation and the energy transition.
Worst Dow Jones Stocks
Through Friday’s close, Intel has lost 53.4% year to date, even with September’s bounce from a 14-year low. Only Boeing’s 41.5% loss comes even close. Nike is next, with a 17.6% decline.
Chevron has slipped 2.1% and Honeywell 1.8%. Dow Inc. ranks No. 24 among Dow Jones performers this year, with a 0.4% gain.
Meanwhile, the overall Dow Jones, which closed at a record high on Friday, is up 12.3% for the year. Click here for a look at the Dow’s five best performers so far this year.
Be sure to read IBD’s The Big Picture column after each trading day to get the latest on the prevailing stock market trend and what it means for your trading decisions.
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