Investing

As the Dow Hits All-Time High, Over Half of Dow Stocks Keep Disappointing Investors

International Business Machines Corp. (NYSE: IBM) has been a continued problem in technology. After hitting a high above $213 in early 2013, IBM now languishes under $137, even after close to a 1% gain on Monday. Just so this doesn’t feel like picking on the company over its sins in the not-so-distant past, IBM’s 52-week high is $152.95. The company has so far been unable to convince Wall Street that its largest-ever acquisition of Red Hat will have an immediate payoff.

Johnson & Johnson (NYSE: JNJ) was last seen up 0.3% at $131.67, but that’s down from a 52-week and all-time high of $148.99. Its exposure to legal woes via asbestos in talcum powder and potential exposure to the opioid crisis have weighed on the stock.

McDonald’s Corp. (NYSE: MCD) may be down closer to 3% at $188.85 after firing star CEO Steve Easterbrook over an improper but consensual relationship with an employee, but investors already had been ringing the register and taking profits ahead of the news. The prior close of $193.94 was down from a 52-week and all-time high of $221.93.

Merck & Co. Inc. (NYSE: MRK) and Pfizer Inc. (NYSE: PFE) are also featured as twofer due to the companies having some overlaps in the issues keeping the shares lower. The drug patent cliff is a never-ending worry, but so is the drug pricing and potential Medicare for All plan. After a 0.5% gain to $85.35, Merck’s 52-week high of $87.35 still pales in comparison to its high of closer to $96 back in 2000. Pfizer was last seen down three cents at $38.36, and its 52-week high of $46.47 should speak for itself.

3M Co. (NYSE: MMM) is a conglomerate that may still not be as troubled as General Electric, but its shareholders are in the midst of international business woes, slow corporate spending woes and even some newer environmental woes. For a company with over 50 straight years of dividend hikes, these are not the norm. Despite 3M shares having recovered more than 15% from lows seen earlier in the year, the last price gain of 1.7% to $173.00 is still down from a 52-week high of $219.75. 3M shares also hit an all-time high just above $250 at the start of 2018.

Travelers Companies Inc. (NYSE: TRV) may be the Dow stock people fail to remember as a Dow stock, but even a 0.4% gain to $131.25 on Monday is still down handily from its 52-week high of $155.09. The insurer’s consensus target price of $141.06 is still even about 10% lower than its high.

UnitedHealth Group Inc. (NYSE: UNH) is the largest private-pay health insurer in America, making it exposed to political targeting. Medicare for All is even a potential existential risk for the company. UnitedHealth shares were down 0.2% at $251.70 on Monday, down from a 52-week high of $287.94.

Walgreens Boots Alliance Inc. (NYSE: WBA), the newest member of the Dow, has seen its shares clobbered. Even after a 2.5% gain to $58.79 on Monday, its 52-week high of $86.31 puts it in perspective. Politicians targeting drug prices, industry efforts to modernize how patients get their medicine and for what price, and even legal woes tied to selling opioid medication, are all weighing on the retail pharmacy chain. Shares of Walgreens even peaked above $96 back in 2015, before adjusting for dividends.

Of the other 15 members of the Dow not mentioned, not every one of those is trading at all-time highs on the same day. The reality is that usually about 10 Dow components are driving the index higher at any given time.

It is important to consider that the members change within all indexes over time. The Dow is no exception. Here are some of the major stocks that have been booted out of the Dow over the past decade: General Electric (2018); AT&T (2015); Alcoa, Bank of America and Hewlett-Packard (2013); Kraft Foods (2012); Citigroup and General Motors (2009).