Investing
The 6 Stocks Punishing the Dow in 2015
June 1, 2015 7:35 am
Last Updated: March 19, 2020 10:41 am
Exxon Mobil
> 2015 YTD: -6.38%
> Dow Weighting: 3.16%
One of the best oil and gas companies in the world, Exxon is also the largest of all. Still, lower oil prices are hurting the company and the group as a whole. Due to the long-term fundamentals, this was renamed as one of the 10 stocks to own for a decade — just don’t expect that share price to launch any time soon. There may still be more risk in the oil patch, and Exxon may decide that it wants to gobble up smaller oil field owners if their stocks stay cheap or get battered further. To prove how strong this is even with lower oil prices: Exxon was able to raise its dividend.
Exxon shares were trading at $85.20, compared to the consensus price target of $93.61. The company has a market cap of $356 billion, and shares are near the lower end of the 52-week trading range of $82.68 to $104.76. Exxon’s recent dividend hike and a lower share price generate a 3.4% yield for new investors. The Exxon 2015 bull/bear analysis called for a 9% gain this year.
Chevron
> 2015 YTD: -6.36%
> Dow Weighting: 3.82%
Chevron has the same sector woes as Exxon, but Chevron decided that it had better not raise its dividend just yet. Chevron posted lower revenues and earnings, just like Exxon. The valuations in the sector are so varied that looking cheap in share prices might not be cheap based on historical price to earnings (P/E) valuations.
Shares of Chevron were trading hands at $103.00, within a 52-week trading range of $98.88 to $135.10. The consensus price target is $114.09, and the market cap is almost $194 billion. Chevron did not raise its dividend, but due to its lower price it now generates a 4.2% yield. The Chevron bull/bear analysis called for a 13% gain in 2015. Needless to say, oil is going to need to seriously recover for that gain to be seen. Analysts have since tempered expectations handily.
Caterpillar
> 2015 YTD: -5.24%
> Dow Weighting: 3.16%
Caterpillar faces growth issues in all the so-called growth markets around the world. Mining and infrastructure are serious issues that helped act as a driver, but now they are a load stone. Currency issues are also present, even though the company overcame much of the concerns. Caterpillar’s Machinery, Energy & Transportation segment had a decline in revenue, and Caterpillar used only $400 million in cash under the $10 billion buyback plan to buy shares last quarter.
Shares of Caterpillar closed out May at $85.32, within a 52-week trading range of $78.19 to $111.46. The consensus price target is $84.37, and the market cap is almost $51 billion. Caterpillar now has a dividend yield of 3.2%. The bull/bear outlook for 2015 expected a 19% gain in 2015, but that has so far been way out of reach.
ALSO READ: 10 Stocks to Own for the Next Decade
The Dow was up 2.1%, if you include the dividends paid in. The SPDR Dow Jones Industrial Average ETF Trust (NYSEMKT: DIA) and the raw index performance was up 1.05% as of the end of May.
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