Investing

11 Blue Chip Stocks That Refuse to Rally With the Market's All-Time Highs

Jon C. Ogg

Published: September 2, 2020 11:00 am

Last Updated: September 2, 2020 1:11 pm

It might seem odd on Main Street that the S&P 500 has managed to recapture all its losses after the panic selling seen in February and March. After all, the economy is still quite depressed and unemployment is close to 10%. The driving force behind the gains is the large companies that are actually winning because of how the pandemic has changed the economy.

Remember that the stock market is really a market of stocks. Not all sectors and companies trade up or down unilaterally. Many companies that would be considered “blue chip” leaders did not participate in the best August in 24 years. In fact, many of the top stocks are still trading down so far this year.

24/7 Wall St. has screened the S&P 500 companies and picked out 11 stocks that just refuse to participate in the rally. The reality is that many more companies could have been considered, but this screen only focused on one or two of the leaders from each sector. The real estate sectors were not included due to their dividend fluctuations.

The screen was used on a dividend-adjusted performance basis off via Finviz as of September 1, 2020. Here are 11 blue chips that have just refused to participate in the greatest recovery of our lives.

AT&T Inc. (NYSE: T) has traded sideways since mid-June and it was ousted from the Dow Jones industrials years ago. Shares were down over 23% year to date and were up less than 1% in the past month. No one even seems to care about AT&T’s nearly 7% dividend yield, as so much of its business remains under secular pressure and the Time Warner acquisition’s timing was rather unlucky in the world of COVID-19. Bullish analyst calls have been ignored so far when it comes to AT&T.

Enterprise Products Partners L.P. (NYSE: EPD) is among the top infrastructure players in energy transportation. What stands out here is that it now screens as having a 10% yield equivalent (income plus return of capital). Its units were down nearly 3% in the past month but down 37% year to date.

Exxon Mobil Corp. (NYSE: XOM) was recently booted out of the Dow, and frankly the investors who are focused on the current economy stocks are just still wanting to invest in the big oil stocks. Exxon has now broken back under the $40 mark, putting its shares down 5% over the past month and down over 42% so far in 2020. The stock’s performance would look even worse without its 8% dividend yield. Goldman Sachs has tried to stay very bullish, but its clients just seem not to care.

Micron Technology Inc. (NASDAQ: MU) is one of the leaders in DRAM and NAND, and while technology has done well in 2020, it has not enjoyed the same recovery sentiment. A stealth revenue warning did not exactly help things. Micron was down 9% over the past month and was basically flat for the year. Investors really don’t ever seem to give Micron a solid valuation, and the current $45 or so stock price was at $60 before the February selling started and it went under $35 at the selling zenith in March.

Mylan N.V. (NASDAQ: MYL) was down this week on news of a voluntary recall of some of its injections. That said, Mylan has been in a very tight trading range since mid-June, and the drugmaker really has not seen a recovery like many other drug stocks since the panic selling peaked in March. Mylan was last seen down over 5% in the past month. While it is down about 20% in 2020, the stock’s peak above $22 before February’s sell-off makes this look far worse than the annual reference.

Newell Brands Inc. (NYSE: NWL) has at least managed to recover from its lows of March and May, but the longstanding turnaround stock is having a hard time in this economy. Maybe Newell is still too diversified, or maybe it still needs more targeting of its portfolio of goods and products it sells. In the past month, Newell’s shares are down almost 3%, but the stock just hit a seven-week low, and it was still down about 17% so far in 2020.

Omnicom Group Inc. (NYSE: OMC) is among the largest and greatest advertising agencies out there, but it is at a time when advertising is weak. The stock has largely been range-bound for nearly 90 days and is still barely above its lows from the selling panic in March. Omnicom is down 33% so far in 2020 and up less than 1% over the past month.

Ralph Lauren Corp. (NYSE: RL) has been stuck in a long trading range for most of the time since April, and if people aren’t going back to work for their casual to dressy casual apparel, then their clothes aren’t as useful when the whole nation may be wearing yoga pants and shorts. The maker of Polo is still down 41% year to date and down 3.5% in the past month.

Southern Co. (NYSE: SO) does not seem to have any specific news, but it is among the nation’s top utilities. There is a continued worry that millions of Americans are going to take advantage of the utility companies simply by not paying their bills, since so many utilities have not terminated services for nonpayment. Southern has better than a $50 billion market cap, and if its shares fall much more, it will have a 5% dividend yield. Southern shares are also down 18% year to date and down about 4.5% in the past month.

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Walgreens Boot Alliance Inc. (NASDAQ: WBA) just cannot catch a break. Its stock suffered after being added into the Dow. With shares now under $37 apiece, this is even lower than at the peak of the selling panic in March. Investors no longer even care about it offering a 4.9% dividend yield. Walgreens was last seen down over 6% in the past month and down over 35% so far in 2020.

Wells Fargo & Co. (NYSE: WFC) has been the largest disappointment of the money center banks. If anyone seems apt to lose customers to newer fintech players or other banks, Wells Fargo comes to mind. Warren Buffett also just threw a huge portion of his stake into the garbage, after seeing huge gains from years past dwindle.