Investing

The Five Worst DJIA Stocks So Far in 2014

After such a strong 2013, and now that the bull market is officially more than five years old, many key market leading stocks are having problems in 2014. The Dow Jones Industrial Average (DJIA) rose 26.5% in 2013, but now we see several key stocks in the DJIA posting serious losses year to date. As we near the end of the first quarter — yes, already — 24/7 Wall St. wanted to identify the five worst DJIA stocks so far in 2014.

We have included the drop seen so far in 2014, as well as the drop from their 52-week highs. Color has also been provided for each, as well as the perceived upside to the consensus price targets now that the stocks are down so much.

Boeing Co. (NYSE: BA) was the best performing stock in the DJIA in 2013, so it is not surprising at all that it is the top performer — to the downside that is — among all 30 DJIA stocks so far in 2014. The recent wing cracks and the Malaysian Airlines disappearance are not helping matters, but the reality is that the DJIA index leaders often have a hard time continuing their surge from one year to the next. Still, shares may or may not be a bargain. Boeing is down by more than 14% from its 52-week high, and all-time high that was seen earlier this year, but year to date the drop to $123.50 has shares down 8.9% from the end of 2013. The consensus analyst price target of $153.25 implies upside 24%, and some analysts have the consensus up much higher than that.

General Electric Co. (NYSE: GE) is down some 8.2% so far in 2014. Its $25.50 share price is also down about 9.2% from its 52-week high of $28.09. What is surprising here is that the market is not rewarding the conglomerate for its plan to unload its retail finance unit in an IPO, something that is supposed to allow GE to command a higher earnings multiple. GE’s consensus analyst price target of $28.80 implies upside of almost 13%, and then there its impressive 3.4% dividend yield to consider as well.

Travelers Companies Inc. (NYSE: TRV) is down by 8.2% year to date, and it is down 10% from its 52-week high and all-time high of $91.68. What is almost funny here is that most investors never even think about Travelers as a DJIA component. It is considered the forgotten DJIA stock, and its market cap is only $29 billion. Trading at $82.60, the consensus analyst target price of $89.80 implies upside of 8%. And then there is the 2.4% dividend to consider.

Chevron Corp. (NYSE: CVX) is down some 7.4% so far year to date, but it is down 10.2% from its 52-week high of $127.83. It is trading at $114.60, and the consensus target of $129.56 implies upside of just over 13% for the oil giant. While Exxon was barely behind this one, Chevron does at least have that higher 3.5% dividend yield, and that dividend is likely to rise yet again. The company’s capex and drilling outlook failed to excite Wall Street, but that happens sometimes, and vast fields are getting harder to find at economical levels.

AT&T Inc. (NYSE: T) is the loser for telecoms so far in 2014, with a drop of 6.3%. While is only the fifth worst performer on a year-to-date basis, the drop from its 52-week high appears to be the worst of all 30 DJIA stocks, with a loss of almost 17% now. Price wars just are not good for the leaders who have been able to sit on their laurels for years. Still, AT&T has that 5.7% dividend yield, now that its stock price has fallen so much. Investors remain concerned that AT&T will try to leverage up for a large international expansion, something likely to prove costly, and with unfavorable tax consequences since income earned overseas gets a huge penalty for being repatriated. The $35.54 consensus analyst price target has come way down in recent months — from more than $40 at one point — but that implies potential upside of 9.2%.

Before thinking that these five are the biggest drags on the DJIA for 2014, other DJIA stocks have been dead weight for a bit longer then 2014. Shares of Cisco Systems Inc. (NASDAQ: CSCO) are down some 18% from their 52-week high, and International Business Machines Corp. (NYSE: IBM) are down some 14% from their 52-week high. Their problems began in 2014, so they are not on the year-to-date loser list of the DJIA stocks.

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