The Worst Performing DJIA Stocks of 2014

Exxon Mobil
> Loss in 2014: 3.1%
> Dividend Yield: 2.80%
> Share Price: $96.03
> Mean Price Target: $102.89
> 52-Wk. Range: $84.79 – $104.76
> Market Cap: $410.14 billion

Exxon Mobil Corp. (NYSE: XOM) just recently fell on hard times because its arctic venture in Russia has fallen victim to U.S. sanctions against Russia. Exxon stock was weak ahead of that news as well, in part due to the declining oil prices from summer’s peak. That drop in price eats directly into the profits of many key wells. Another drag is that Exxon has never seemed to capture a home run on its natural gas operations, not yet at least. There are some good things here — analysts still see upside and Warren Buffett’s Berkshire Hathaway has become a large, multibillion dollar stakeholder. Its dividend has close to a 3% yield, and Exxon has been aggressive in buying back stock over the years.

> Loss in 2014: 4.1%
> Dividend Yield: 0.80%
> Share Price: $212.46
> Mean Price Target: $250.68
> 52-Wk. Range: $180.11 – $235.50
> Market Cap: $133.71 billion

Visa Inc. (NYSE: V) has underperformed American Express in 2014, and it holds an even less attractive 0.8% dividend yield. Still, the company has massive room to raise that dividend. Visa is also far from cheap in valuation at 20 times next year’s expected earnings and almost 25 times trailing earnings. Another risk is that it has the largest weighting of the DJIA by far, which can make it drag down (or pull up) the index based on the direction of news. Because it has only been a Dow stock for a year or so, many investors still might not identify it as a DJIA stock yet. The good news here is that the more than $20 pullback has left much upside in the stock. Also good news is that each new Visa account from emerging and developing markets is one more source of revenue as the world moves to being a cashless one.

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General Electric

> Loss in 2014: 4.8%
> Dividend Yield: 3.50%
> Share Price: $26.02
> Mean Price Target: $29.91
> 52-Wk. Range: $23.50 – $28.09
> Market Cap: $261.38

General Electric Co. (NYSE: GE) has found itself in a conundrum. The company has reached an agreement to unload its appliances unit and it has completed the first stage of exiting such heavy exposure to the U.S. consumer finance with the recent IPO of Synchrony Financial. The Alstom acquisition hasn’t managed to excite investors yet, even if it will help GE get a higher earnings multiple as an industrial conglomerate. A win here is that GE leads conglomerates in dividends with its 3.5% dividend yield. GE is also cheap against the market at just over 14 times next year’s earnings estimates. GE had the first real win in the new class of nuclear reactors, which could add billions in orders down the road. Lastly, GE has one of the highest analyst upside targets, with more than 15% upside, before considering the dividend. As we have said, the GE of 2016 will be grossly different from the GE of 2006 or 1996.

> Loss in 2014: 5.0%
> Dividend Yield: 2.40%
> Share Price: $127.38
> Mean Price Target: $152.95
> 52-Wk. Range: $113.34 – $144.57
> Market Cap: $91.76 billion

Boeing Co. (NYSE: BA) is having a rough and choppy 2014 on concerns that aircraft manufacturers may struggle to increase production because of constraints in the supply chain. This is on the heels of Airbus challenging Boeing on its proposals to increase production and that the market may be unable to sustain it. Perhaps the biggest sin may simply be that Boeing’s stock nearly doubled in 2013, potentially making investors look elsewhere. However, as airline fleets continue to age, Boeing is making the move to capitalize on the demand, despite the economic downturn. Boeing recently won another NASA contract for the space taxi, an award of $4.2 billion. Plus it has all of its massive backlog that was added to at the summer air show. Boeing’s forward earnings multiple of about 15 times is also not expensive against the market, and demand for 787 Dreamliners is likely to grow exponentially in the years ahead. A large pullback now leaves an implied 20% upside, without considering the dividend yield.

United Technologies
> Loss in 2014: 5.9%
> Dividend Yield: 2.20%
> Share Price: $105.42
> Mean Price Target: $127.24
> 52-Wk. Range: $102.21 – $120.66
> Market Cap: $96.56 billion

United Technologies Corp. (NYSE: UTX) has taken a breather in 2014 after rising more than 40% in 2013. This may be the notion that the global growth story has gone cold again, and now United Tech has managed to even underperform GE in 2014 after outperforming it in 2013. This conglomerate’s dividend yield of 2.2% is not exactly the highest in the DJIA. The recent $15 pullback in the stock has actually made United Tech look inexpensive at 14 times next year’s expected earnings. The stock currently is only about $3 above its 52-week low, which is far from the norm considering that the Dow was down only about 2% from its all-time highs. One issue that could attract new buyers soon is that the analyst community expects almost 20% upside in the stock, before considering the dividend.

ALSO READ: 6 More Expected DJIA Dividend Hikes Before 2014 Ends