2015 has come to an end. That means it is time to look forward. One of the more common strategies that investors with long-term outlooks use is to evaluate the worst performing stocks of companies that have long histories and that have businesses that will be around for the years and generations ahead. This can be dangerous, but 24/7 Wall St. wanted to look into the worst performing Dow Jones Industrial Average stocks of 2015.
The Dow Jones Industrial Average had a performance of negative 2.23% in 2015. Sadly, there were seven Dow stocks that were down worse than 10% in 2015, going into the close of the year. We are also entering a strange period ahead, when the Federal Reserve finally is hiking interest rates, but at a time when the economic readings have been worsening. The woes of a strong dollar and a weakening picture in the key growth markets with tanking energy and commodity prices has only hurt even more.
In an effort to evaluate these companies, we have provided the big picture here. Currency has played a role, but some is just a series of misfortunes and missteps. Valuation metrics and the trading histories have been included in the review of each company.
These were the five worst performing Dow stocks of 2015.
> 2015 performance: −26.6%
The Dow’s biggest loser in 2015 was Wal-Mart Stores Inc. (NYSE: WMT). This was very unexpected, but the disappointing sales trends of first part of the year met higher operating costs and higher wages toward the end of the year. That made for bad 2016 guidance, and management seems like it will have to learn better communications skills. Does it help if Wal-Mart now screens out as a cheaper stock than it has in many years? And revenues are now within striking distance of $500 billion per year.
Shares of Wal-Mart closed out 2015 at $61.30. Over the course of the year it fell by nearly 27%, on a dividend adjusted basis. The stock has a consensus analyst price target of $63.63 and a 52-week trading range of $56.30 to $90.97. Its market cap is roughly $196 billion, and its dividend yield of 3.2%. Compared to 2016 expected earnings, shares trade at a multiple of roughly 15.
> 2015 performance: −24.2%
American Express Co. (NYSE: AXP) may have Warren Buffett and Berkshire Hathaway as the largest shareholder, but the good news stops there. Having the highest income client base hasn’t helped the company at this time, and losing Costco just added insult to injury. The dividend is underwhelming as well, and actually turning itself around may be hard considering that American Express already has exited or paired down on so many operations. Is the stock cheap, or is it a value trap?
Shares of American Express shares closed Thursday at $69.55. Over the year, it fell by 24.2%, on a dividend adjusted basis. It has a market cap of roughly $69 billion and a dividend yield of 1.7%. The consensus analyst price target is $80.92, and the 52-week trading range of $67.57 to $93.94. Compared to 2016 expected earnings, shares trade at a multiple of nearly 13.