Dow Jones: Worst-Performing Stocks In 2020

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Dow Jones: Worst-Performing Stocks In 2020

article

By the beginning of 2020, most investors were expecting to be in the abyss, especially in terms of the Dow Jones Industrial Average (DJIA), which could not catch a height, unfortunately. The company found its contrarian catalyst and bounced back its market in the pandemic, thus lagging badly with the overall stock index finished up at 7.2% for 2020.

Some of the DJIA’s stocks experienced double-digit percentage losses, so there rises the utmost need to discuss them all to avoid any future mistakes. That’s right, we are going to talk about the worst-performing DJIA stocks in 2020. Not only this, but we’ll also discuss the do’s and don’ts of stock market investing so that you could make wise future decisions.

But before jumping to these main threads, let’s take a glance at the history of the Dow Jones Industrial Average (DJIA).

Brief History Of Dow Jones Industrial Average (DJIA)

Created in 1896 by Charles Dow along with his business partner Edward Jones, the Dow Jones Industrial Average (DJIA) or Dow 30 is the second oldest U.S. market index that tracks 30 publicly-owned and largely-established U.S. blue-chip companies. Before creating DJIA, Charles Dow created his first stock index popularly known as ‘Dow Jones Transportation Average (DJTA)’, which is the most popular criterion of the U.S. transportation sector.

Over the years, DJIA has undergone a plethora of transformations and developments. Its initial components included the industries associated with railroads, gas, sugar, tobacco, and oil. In 1916, DJIA updated its components from 12 to 20. And back in 1928, the components were further raised to 30, which are still powerful today. In 1932, 8 stocks were eliminated and replaced by new components, which included Coca-Cola.

Gradually, DJIA also updated the method of its calculation. Earlier, it was calculated by the simple arithmetic mean method, but today, the ‘Dow Divisor’ is included in the calculation.

Worst Performing Dow Jones Stocks In 2020

Although everyone buzzes about the winners, it is also instructive to have a look at the losers of the year. Let’s begin without any delay!

1. Boeing

This shouldn’t come as a surprise that Boeing’s stock is the DJIA’s biggest laggard in 2020. Due to the two fatal crashes, the company’s best-sellingaircraft – Boeing 737 Max Jet was already grounded in March 2019. Moreover, the coronavirus pandemic led to thousands of layoffs and significant production cutsas air travel reduced by 60%-70% globally. Having looked at the current condition, the airline companies would not be able to recover until 2024.

In comparison to 2019’s closing price, Boeing stocks traded down by around 43.7% in 2020.

  • Composite Rating: 6 (Weak)
  • EPS: -$7.89
  • Current Opening Price: $213.61
  • Market Cap: $118.49 Billion
  • 52-Week Range: $89 to $349.95
  • Yield: 0.00%
  • 1-Year Performance: -36.38%

2. Walgreens Boots Stock

The second worst performing DJIA’s stock is Wallgreens Boots Alliance Inc. Although there is no doubt in saying that Walgreens stores were already lethargic in 2019, the store visits get worsened in 2020 due to the digitization of shopping in the pandemic.

The company itself reported that the pandemic kept it behind with the cost of approximately $0.46 in earnings per share for its 2020 fiscal year. The company had already lost about 32.7% of shares in 2020 and the negative effects of the pandemic are more likely to persist in the first half of its 2021 fiscal year.

  • Composite Rating: 38
  • EPS: -$0.81
  • Current Opening Price: $45.05
  • Market Cap: $39.15 Billion
  • Yield: 4.14%
  • 52-Week Range: $33.36 to $59.78
  • 1-Year Performance: -16.62%

The company’s relative strength is declining, so much so, that it is at the bottom 8% of all the stocks.

3. Chevron Stock

By losing around 30% of its market value, Chevron has gained the third position in the worst-performing DJIA stocks in 2020. At the beginning of the year, the crude prices started at above $60 per barrel. However, it fell down dramatically to below $25 per barrel due to the COVID-19 pandemic, thus creating a rampant downfall for this integrated oil and gas giant.

As demands for fuel became low, the oil prices got affected terribly in 2020, and the Chevron stock shares dropped 29.9%. Although the stock gained 17.3% in quarter 4, there is no expectation for the oil prices to catch a height in 2021. Below are some data associated with the Chevron Stock!

  • Opening Price: $92.08
  • Market Cap: $175.33 Billion
  • EPS: $-6.18
  • Yield: 5.67%
  • 52-Week Range: $5.60 to $117.69
  • 1-Year Performance: -21.78%

4. Intel Stock

Dropping more than 21% in 2020, the chipmaker Intel Corp. also faced financial downhill, which is unlikely to be resolved in the next year too. In July, Intel stock shrank 21%, whereas, in December, the company lost 6%.

  • Opening Price: $52.45
  • Market Cap: $211.66 Billion
  • P/E Ratio: 10.13
  • EPS: $5.10
  • EPS Rating: 86/99
  • Composite Rating: 41
  • Yield: 2.56%
  • 1-Year Performance: -12.37%
  • 52-Week Range: $43.61 to $69.29

5. Merck Stock

Losing around 11.5% of its market value, Merck & Co. Inc. experienced a significant downfall in 2020, thus keeping investors away this year. Moreover, the company doesn’t even have any space in the COVID-19 pandemic vaccine. The Merck Stock has:

  • Opening Price: $84.37
  • Market Cap: $210.07 Billion
  • P/E Ratio: 18.34
  • EPS: $4.53
  • EPS Rating: 86
  • Composite Rating: 42
  • Yield: 3.13%
  • 1-Year Performance: -7.26%
  • 52-Week Range: $65.25 – $92.06

6. JPMorgan

With the 32.5% fall of the stock in 2020, JPMorgan Chase (the largest U.S. bank in terms of market value) is another worst-performing DJIA stock in 2020. As the coronavirus pandemic forced the central bank to keep the interest rates lower, it led to a decline in interest income, thus threatening the profitability of JPMorgan.

  • Opening Price: $135.97
  • Market Cap: $414.62 Billion
  • P/E Ratio: 17.75
  • EPS: $7.66
  • EPS Rating: 72
  • Composite Rating: 42
  • Yield: 2.65%
  • 1-Year Performance: -0.04%
  • 52-Week Range: $76.91 – $140.76

Do’s & Don’ts For 2021

Do’s

  • If you are not aware of how to research in order to find the best stocks, then just stick to index funds because it will provide you with diversification, that too, without breaking your bank.
  • Make sure that your portfolio is diverse because it will provide multifaceted protection against many risks.
  • As stocks in 2021 could be more unstable and volatile because of the pandemic, make sure to keep plenty of cash in your hands.
  • Always invest while considering the larger picture in the future. This simply means you should always invest for the long-term because it brings you significant wealth.

Don’ts

  • Do not invest blindly based on any free recommendation or tip.
  • Do not take unnecessary risks. Safeguarding your money is more important.
  • Do not bring emotions while taking decisions, no matter how much you like a company or enterprise.
  • Do not keep unrealistic expectations because 2021 could be highly unpredictable.

The Bottom Line

If we talk about the current year, not every one of the DJIA’s 30 components has been able to fight the black year to date. Believe it or not, the DJIA’s worst performances in the past year have forced the company to start correcting its mistakes for future years so that it would not have had to suffer such big losses.

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