Is GE on the Way to Being the Worst Performing Dow Stock of 2017?

Telecom & Wireless

Published: June 10, 2017 9:20 am

Last Updated: January 12, 2020 11:10 am

Verizon Communications Inc. (NYSE: VZ) last week saw its share price increase by $0.28 (less than 1%), maintaining its position as the worst-performing stock among the 30 equities included in the Dow Jones Industrial Average (DJIA). For the year to date, Verizon’s shares are down 12.5%. General Electric Co. (NYSE: GE) is closing in and has been right on Verizon’s tail for a while with a loss of 11.6% for the year.

The Verizon stock has recovered slightly from its new 52-week low of $44.46 that it hit in mid-May. Shares have managed to add about 5% since then. At the same time, broad markets have rallied and hit new highs across the board.

We can look forward to next week when Verizon’s subsidiary AOL will merge with Yahoo’s core assets. Specifically the merger is expected to close on June 13, 2017. After the merger, Verizon is expected to initiate some layoffs totaling in the thousands. This merger has the potential to generate some incredible advertising revenue going forward.

Recently, Verizon also said that it would continue to pay its $0.58 per share quarterly dividend.

On the other hand, GE is making a case for being the worst performing Dow stock, but it just can’t seem to catch Verizon. Credit Suisse actually mentioned in a recent report that GE’s sell-off has created an attractive entry point. On the bearish side, there are risks that GE’s dividend may be cut or that it may have been overstated.

On the plus side, GE has recently made a few agreements for power generation, aircraft engines and services in Vietnam. These deals are valued up to $5.6 billion.

Shares of Verizon closed Friday at $46.72, with a consensus analyst price target of $50.05 and a 52-week trading range of $44.46 to $56.95.

GE Shares closed the week at $27.94, with a 52-week range of $27.10 to $33.00 and a consensus price target of $32.14. Over the course of the week, the stock remained relatively flat.

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