Investing

Key DJIA Stocks at Risk of Setting 52-Week Lows

This year is turning out to be a choppy one for stocks. Now that the bull market is six years old, and now that investors have lined up to buy stocks on every pullback for the past three years, 24/7 Wall St. could not help but notice that several of the 30 Dow Jones Industrial Average (DJIA) components are trading close to their 52-week lows.

It is one thing for the market to be choppy. After all, the DJIA and S&P 500 were very close to being flat in the first quarter of 2015. Except for the short sellers, 52-week lows are never a good thing for traders and investors to see.

Some of the moves may seem obvious. Others may seem surprising. Included in our review of each DJIA stock close to 52-week lows was not just the price, but the 52-week range, the consensus analyst price target and color that has been added on each stock. Also mentioned is the dividend of each stock.

The four DJIA stocks currently within 5% of their 52-week lows are as follows: American Express Co. (NYSE: AXP), Caterpillar Inc. (NYSE: CAT), Exxon Mobil Corp. (NYSE: XOM) and Microsoft Corp. (NASDAQ: MSFT). In addition, AT&T Inc. (NYSE: T) is close to its 52-week low after recently being replaced in the DJIA by Apple.

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Not Leaving Home With a Card: American Express

American Express may have run into problems with losing its Costco partnership. While the company is one of several expected dividend hikes ahead, its dividend is so low already. We just do not expect it to get too aggressive on the dividend, and the 1.3% yield is just not impressive for its stature of customers. Trading at $78.25, American Express has a 52-week trading range of $77.12 to $96.24. Analysts are still positive on the stock, with a consensus price target of $87.40.

Global Growth Death: Caterpillar

Last seen at $80.50, Caterpillar shares trade in a 52-week range of $78.19 to $111.46. The equipment giant has had to suffer through currency headwinds and also had to suffer as growth markets in Asia and South America are now by and large on pause. Despite all the pullback that has been seen, the consensus analyst price target on Caterpillar is now only $84.29 — so the expectations are very low. That also means that the bar is now also set very low.

Black Gold Is Mud: Exxon Mobil

Exxon shares were last trading at $85.05, against a 52-week range of $82.68 to $104.76. That is barely $2 above the 52-week low, and the consensus analyst price target is $93.20. It turns out that not even the mightiest oil company in the world can escape the woes from oil falling from over $100 a barrel down to under $50. Exxon is closer to the 52-week low than rival Chevron, but it also likely will be able to raise its dividend by more than Chevron. Just to let you know how cautious the climate is: even Warren Buffett threw in the towel and sold his large stake in Exxon.

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Reversal of Fortune: Microsoft

Microsoft has sure seen a reversal of fortune in 2015. After getting the boost of the operating system mandatory Windows XP support ending, now Microsoft is looking forward to Windows 10 (actually Windows 9, but jumping to 10) later in 2015. CEO Satya Nadella already has had the honeymoon phase of the turnaround period, and now his migration to cloud and mobile has to be proven rather than assumed. Shares are at $40.85, within a 52-week range of $38.51 to $50.05 — a bad omen considering it was one of the best DJIA stocks of 2014. The consensus price target for Microsoft is $46.97, and it has a dividend yield of just over 3%.

The Runner-Up: AT&T

AT&T Inc. (NYSE: T) is no longer a DJIA stock, but it was only just recently replaced by Apple. AT&T was also the highest dividend yield of all Dow stocks, prior to ouster from the index. The stock is closer to its 52-week low than rival Verizon, and AT&T is suffering from the same price war that Verizon is suffering from. Still, its yield is now just over 5.7%, and it seems as though the dividend will remain safe ahead. Last seen at $32.85, AT&T has a 52-week range of $32.07 to $37.48. Analysts have a consensus price target of $34.09, but that target keeps listing lower through time.

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