Investing

Procter & Gamble Still the Dow's Worst-Performing Stock

Paul Ausick

Published: June 2, 2018 8:35 am

Last Updated: January 11, 2020 10:52 pm

Procter & Gamble Co. (NYSE: PG) dropped less than half a point from its share price last week, enough to keep a grip on the company’s ranking as the worst-performing Dow Jones industrial average stock of this year. So far in 2018, the shares have lost a fraction over 20%. This is P&G’s seventh consecutive week as the Dow’s worst stock for the year.

The second-worst Dow stock so far this year is General Electric Co. (NYSE: GE), which is down 19.2%. That is followed by Walmart Inc. (NYSE: WMT), down 16%, 3M Co. (NYSE: MMM), down 15.2%, and Johnson & Johnson (NYSE: JNJ), down 13.2%. Losers outnumber winners for the year to date on the Dow by a score of 19 to 11.

The Dow dropped almost 118 points over the course of the last week to close at 24,635.21, down about 0.5%. For the year to date, the consumer staples sector has dropped about 13.5%, the worst among the 10 market sectors.

The consumer staples sector has struggled for a few months now. Typically a defensive sector, staples are particularly attractive when bond yields are low. P&G, for example, pays a dividend yield of 3.94% at Friday’s closing price.

The 10-year U.S. Treasury broke through the 3% yield barrier in late April and reached a peak of about 3.12% on May 17. Friday’s closing quote was 2.9%. P&G looks a lot more attractive with that full-point difference.

The yield on 10-year Treasuries began climbing in January, and P&G’s stock began falling. The gain in the yield on 10-year Treasuries since January is nearly 18%, not far from the 20% decline in P&G stock.

Procter & Gamble stock closed at $73.45 on Friday, up about 0.4% for the day, in a 52-week trading range of $70.73 to $94.67. The 12-month consensus price target on the stock is $81.55, unchanged from the prior week, and the forward price-to-earnings ratio is 16.43.