15 Worst Performing Dow Stocks YTD
In this article, we discuss 15 worst performing Dow stocks year-to-date. If you want to skip our detailed discussion on stock market performance overall, head directly to 5 Worst Performing Dow Stocks YTD.
In a July report by J.P. Morgan, it was stated that global economic growth is expected to slow down in the latter part of 2023, while inflation appears to be easing. However, it's worth noting that global core inflation is projected to remain elevated, staying above 3% until 2024. This ongoing high inflation will continue to exert pressure on central banks, potentially leading to further tightening measures. Bruce Kasman, Chief Global Economist at J.P. Morgan, said:
“We do not think inflation is going to come back down to central bank comfort zones by themselves. Yes, there’s a decline going on. But no, we do not think you’re going to get inflation back below 3% in the U.S. or the euro area this year in an environment where supply has been damaged in a more lasting way and inflation psychology has shifted.”
In the first half of 2023, global economic growth gained momentum, reaching a rate of 2.8%. So far, efforts to tighten monetary policies have balanced the diminishing impact of supply disruptions caused by the COVID-19 pandemic and Russia's invasion of Ukraine. However, starting in 2022, global policy rates have increased by nearly 400 basis points, affecting spending sensitive to interest rates and limiting industrial production. Despite the current growth momentum, it is believed that the global economy's resilience is decreasing. Consequently, it is expected that developed markets may undergo another round of tightening measures before the end of 2023 to control inflation. However, such actions may have adverse effects on the private sector's well-being. Consequently, there is a possibility of a synchronized global economic recession occurring, potentially before the end of 2024. J.P. Morgan Research anticipates that the United States may experience a mild recession toward the end of 2023. This is attributed to the Federal Reserve's conservative monetary policy, which is leading to stricter credit availability and a gradual decline in economic growth. The Western European economy faced challenges during the winter due to high energy prices. Although the first quarter of 2023 showed some improvement, overall economic growth remained relatively stagnant.
In the first six months of 2023, there was a noticeable variance in stock performance, with differences observed in size, sectors, and investment styles. Surprisingly, this occurred amidst an unusual period of low volatility. Looking ahead, without any proactive measures from the Federal Reserve, experts expect a more difficult economic environment for stocks in the latter part of 2023. A similar less optimistic outlook is observed for equity markets in other regions across the world. Dubravko Lakos-Bujas, Global Head of Equity Macro Strategy at J.P. Morgan, stated:
“Given that multiple expansion has been the main driver of performance year to date, we see unattractive risk-reward for equities and increasing investor complacency ahead of our expectation that the business cycle will further decelerate in the second half of the year, with the onset of a recession likely in the fourth quarter of 2023 or first quarter of 2024. What’s more, consumers are starting to show signs of weakness, and there is a risk that liquidity and credit conditions could tighten in the coming months.”
According to S&P Global, the Dow Jones Industrial Average showed improvement in September, outperforming the S&P 500 but still experiencing a decline of 3.5%; -3.42% with dividends considered. However, when we consider the year-to-date performance, the Dow has lagged significantly behind the S&P 500, with a gain of 1.09%; 2.73% with dividends, while the S&P 500 has recorded an increase of 11.68%. This difference in performance is primarily attributed to how these indices are constructed, with factors like price weighting versus market value weighting playing a role. Historically, these differences tend to align, but in shorter time frames, disparities can emerge.
In this article, we discuss some of the worst performing Dow stocks which include Verizon Communications Inc. (NYSE:VZ), 3M Company (NYSE:MMM), and Walgreens Boots Alliance, Inc. (NASDAQ:WBA).
Photo by nick chong on Unsplash
Our Methodology
We sorted the following Dow stocks based on year-to-date share price performance of each stock. For each stock have mentioned the reason behind its underperformance. We have also assessed the hedge fund sentiment toward each stock from Insider Monkey’s database of 910 elite hedge funds tracked as of the end of the second quarter of 2023. The list is arranged in order of the lowest to highest year-to-date share price loss of each firm as of October 11.
Worst Performing Dow Stocks YTD (And Why)
15. The Walt Disney Company (NYSE:DIS)
Year-to-Date Share Price Performance as of October 11: -4.63%
Number of Hedge Fund Holders: 92
The Walt Disney Company (NYSE:DIS) functions as a global entertainment business. It is divided into two parts – Disney Media and Entertainment Distribution; and Disney Parks, Experiences and Products. On September 19, The Walt Disney Company (NYSE:DIS)’s stock saw a decrease of over 3%. This decline followed the company's announcement of significant investments in its Parks segment, with the goal of doubling the current investment.
The Walt Disney Company (NYSE:DIS) stock has faced setbacks due to the negative news surrounding its conflict with Florida legislators over a controversial education law. This has contributed to wider concerns that the streaming industry's growth is slowing down, impacting the outlook for The Walt Disney Company (NYSE:DIS)’s Disney+ streaming service.
As per Insider Monkey’s second quarter database, 92 hedge funds were bullish on The Walt Disney Company (NYSE:DIS), compared to the last quarter when 95 funds had invested in the stock. Nelson Peltz’s Trian Partners held a significant position in the company, with over 6.4 million shares worth $573.63 million.
In addition to Verizon Communications Inc. (NYSE:VZ), 3M Company (NYSE:MMM), and Walgreens Boots Alliance, Inc. (NASDAQ:WBA), The Walt Disney Company (NYSE:DIS) is one of the worst performing Dow stocks YTD.
Diamond Hill Large Cap Strategy made the following comment about The Walt Disney Company (NYSE:DIS) in its Q2 2023 investor letter:
“Our bottom contributors in Q2 included health insurance company Humana, bio-pharmaceutical company Pfizer and global entertainment company The Walt Disney Company (NYSE:DIS). Disney’s Bob Iger returned to the CEO’s seat in November 2022, replacing Bob Chapek, who left following a turbulent tenure. As a result of disappointing quarterly results and incremental commentary suggesting a more inline strategy with other media, the market has become less confident that Iger will achieve a turnaround by the end of his 1.5- year contract. We continue to believe Disney has a unique collection of assets and owns some of the best content among all media companies. Their ability to monetize this content across many platforms — studio, theme park, toys, streaming — is incredibly valuable; thus we remain investors.”
14. McDonald's Corporation (NYSE:MCD)
Year-to-Date Share Price Performance as of October 11: -5.07%
Number of Hedge Fund Holders: 68
McDonald's Corporation (NYSE:MCD) is categorized as one of the worst performing Dow stocks. It is a company that owns and franchises McDonald's restaurants in the United States and around the world. It was established in 1940 and has its headquarters in Chicago, Illinois. On October 5, McDonald's Corporation (NYSE:MCD) declared a $1.67 per share quarterly dividend, up 9.9% from the previous dividend of $1.52. It is to be paid on December 15 to shareholders of record as of December 1.
Investors in McDonald's Corporation (NYSE:MCD) had been facing their toughest period of losses in four years, primarily due to growing worries that the recent uptick in interest rates could limit consumer spending. On October 6, McDonald's Corporation (NYSE:MCD)’s stock dropped by 1.4%, setting it on course for its lowest closing price since October 17, 2022.
According to Insider Monkey’s second quarter database, 68 hedge funds were bullish on McDonald's Corporation (NYSE:MCD), up from 64 funds in the preceding quarter. Ken Griffin’s Citadel Investment Group is the largest position holder in the company, with 2.6 million shares worth $777.06 million.
13. The Home Depot, Inc. (NYSE:HD)
Year-to-Date Share Price Performance as of October 11: -5.65%
Number of Hedge Fund Holders: 68
The Home Depot, Inc. (NYSE:HD) functions as a home improvement retailer, offering a range of building materials, home improvement items, lawn and garden products, as well as decor items, along with facilities maintenance, repair, and operational products. It is currently one of the worst performing Dow stocks. The Home Depot, Inc. (NYSE:HD) reported that lower temperatures and declining lumber prices had a negative impact on first-quarter sales. Additionally, the rise in interest rates could discourage potential homebuyers and lead to a moderation in home prices.
As per Insider Monkey’s second quarter database, 68 hedge funds were bullish on The Home Depot, Inc. (NYSE:HD), an increase from 65 funds in the preceding quarter. Israel Englander’s Millennium Management is the largest shareholder of the company, with a position comprising 1.8 million shares valued at $561.3 million.
Madison Sustainable Equity Fund made the following comment about The Home Depot, Inc. (NYSE:HD) in its second quarter 2023 investor letter:
“The Home Depot, Inc. (NYSE:HD) celebrates 30 years of giving back. Team Depot was created in 1993 as a way of organizing associates who were eager to volunteer in their communities. For 30 years, Team Depot associates have worked side by side with non-profits around the United States. Focus areas include spending time with the elderly and activities with at-risk youth. Team Depot also improves the homes and lives of veterans and helps communities impacted by natural disasters.
During the quarter, Home Depot set a goal for battery-powered products to represent over 85% of outdoor lawn equipment sales in the U.S. and Canada by the end of fiscal 2028. Push lawn mowers and handheld leaf blowers and trimmers will run on rechargeable battery technology instead of gas. This will reduce 2 million metric tons of greenhouse gas emissions annually.”
12. The Procter & Gamble Company (NYSE:PG)
Year-to-Date Share Price Performance as of October 11: -5.65%
Number of Hedge Fund Holders: 74
The Procter & Gamble Company (NYSE:PG) offers a range of well-known consumer products under its brand. The company is divided into five segments – Beauty, Grooming, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care. It is one of the worst performing Dow stocks. On July 28, The Procter & Gamble Company (NYSE:PG) reported fourth quarter results for fiscal year 2023. The company announced a non-GAAP EPS of $1.37, beating Wall Street estimates by $0.05. The revenue of $20.55 billion increased 5.32% year-over-year, surpassing market estimates by $566.59 million.
The Procter & Gamble Company (NYSE:PG) experienced a drop in its stock value as it predicted earnings and sales growth that did not meet Wall Street's expectations. The company also cautioned about another year of increased costs, indicating it faces more challenges compared to some of its industry peers in the midst of high inflation. While consumer-products businesses enjoyed a rise in demand during the pandemic, they are now adjusting to a slower global economy.
According to Insider Monkey’s second quarter database, 74 hedge funds were bullish on The Procter & Gamble Company (NYSE:PG), compared to 75 funds in the prior quarter. Terry Smith’s Fundsmith LLP is the top shareholder of the company, with 4.85 million shares valued at $735.8 million.
ClearBridge Sustainability Leaders Strategy made the following comment about The Procter & Gamble Company (NYSE:PG) in its Q2 2023 investor letter:
“Reinforcing defensive exposure and pushing our consumer staples positioning from underweight to overweight the benchmark, we added The Procter & Gamble Company (NYSE:PG), a leading consumer products company with leading franchises in a variety of stable categories, including fabric care, baby, beauty and health. It is a high-quality company with a track record of superior growth, market share gains and attractive returns on capital. It also has defensive attributes when economic conditions deteriorate. Procter & Gamble is a sustainability leader with a demonstrated commitment to addressing environmental and social objectives in how it manages the business, and it has above-average corporate governance practices. Many Procter & Gamble products have a positive impact by promoting hygiene, self-care or health.”
11. Merck & Co., Inc. (NYSE:MRK)
Year-to-Date Share Price Performance as of October 11: -6.91%
Number of Hedge Fund Holders: 78
Next on the list of the worst performing Dow stocks is Merck & Co., Inc. (NYSE: MRK), which functions as a global healthcare company. Its operations are divided into two parts – Pharmaceutical and Animal Health. The Pharmaceutical segment provides medications for human health, while the Animal Health segment focuses on creating, producing, selling veterinary medications, vaccines, and solutions for health management. On August 1, Merck & Co., Inc. (NYSE: MRK) reported a Q2 non-GAAP EPS of -$2.06 and a revenue of $15.04 billion, outperforming estimates by $0.12 and $585.09 million, respectively. Despite beating expectations in terms of revenue because of high sales of its cancer drug, Keytruda, and HPV vaccine, Gardasil, the company experienced a loss due to the acquisition of biotechnology firm, Prometheus Biosciences.
According to Insider Monkey’s second quarter database, 78 hedge funds were bullish on Merck & Co., Inc. (NYSE: MRK), compared to 75 funds in the previous quarter. Cliff Asness’ AQR Capital Management held the largest position in the company, with 2.91 million shares worth $331.84 million.
Carillon Eagle Growth & Income Fund made the following comment about Merck & Co., Inc. (NYSE:MRK) in its Q2 2023 investor letter:
"Merck & Co., Inc. (NYSE:MRK) presented positive clinical data for a new drug in its oncology pipeline, announced an acquisition that was viewed favorably by investors, and reported strong first-quarter financial results while also increasing its earnings guidance for 2023."
10. Chevron Corporation (NYSE:CVX)
Year-to-Date Share Price Performance as of October 11: -7.41%
Number of Hedge Fund Holders: 73
Chevron Corporation (NYSE:CVX) is involved in integrated energy and chemical operations in the United States and on a global scale. It is one of the worst performing Dow stocks. On September 14, Chevron Corporation (NYSE:CVX)’s Wheatstone liquefied natural gas facility in Australia experienced a production disruption. This occurred in the midst of an ongoing strike by workers at two facilities that collectively contribute around 5% of the world's LNG production. The decrease in the year-to-date stock performance made the negative sentiment about the stock even worse after a major investor sold off their shares. Warren Buffett and Berkshire Hathaway sold roughly $6 billion of Chevron Corporation (NYSE:CVX) stock in the first quarter.
As per Insider Monkey’s second quarter database, 73 hedge funds were bullish on Chevron Corporation (NYSE:CVX), up from 64 in the last quarter.
Carillon Eagle Growth & Income Fund made the following comment about Chevron Corporation (NYSE:CVX) in its Q2 2023 investor letter:
“Chevron Corporation (NYSE:CVX) stock also traded lower as global oil prices declined in response to fears of an economic slowdown. Energy stocks were the second-worst-performing sector in the quarter.”
9. The Goldman Sachs Group, Inc. (NYSE:GS)
Year-to-Date Share Price Performance as of October 11: -9.59%
Number of Hedge Fund Holders: 70
The Goldman Sachs Group, Inc. (NYSE:GS) offers financial services to businesses, financial organizations, governments, and individuals worldwide. Its operations are divided into three segments – Global Banking & Markets, Asset & Wealth Management, and Platform Solutions. The Goldman Sachs Group, Inc. (NYSE:GS) is one of the worst performing Dow stocks. On July 19, The Goldman Sachs Group, Inc. (NYSE:GS) announced a Q2 GAAP EPS of $3.08, missing Wall Street expectations by $1.06. The revenue of $10.89 billion decreased 8.2% year-over-year, yet exceeded market estimates by $160 million. The Goldman Sachs Group, Inc. (NYSE:GS) has faced challenges in its performance because it heavily depends on investment banking and trading for revenue, in contrast to rival banks that have more significant consumer banking or asset management operations.
As per Insider Monkey’s second quarter database, 70 hedge funds were bullish on The Goldman Sachs Group, Inc. (NYSE:GS), one higher than the previous quarter. Boykin Curry’s Eagle Capital Management held a significant position in the company, with 2.8 million shares worth $904.64 million.
Manole Capital Management made the following comment about The Goldman Sachs Group, Inc. (NYSE:GS) in its Q3 2022 investor letter:
“Back in 2019, The Goldman Sachs Group, Inc. (NYSE:GS) made a splash in the card industry by working with Apple and MasterCard on a credit card. The actual card is fairly sleek (as you can see below), as customers' names are etched into an Apple titanium card. The no-fee card generated a lot of hype, as many early users were quick to post their latest card on various social media sites.
The initial goal of Marcus (back in 2016) was to leverage Goldman’s wonderful name brand and build a full-service digital bank. This card was a large piece of GS’s ambitions to grow its retail banking franchise called Marcus. After 5 years, Marcus now has 14 million customers and $16 billion in loan balances. Surprisingly, Marcus now represents nearly 20% of the firm’s total revenue.
We thought it would be interesting to look at how the Apple Card is doing in terms of loans and exposures. With over $100 billion in assets, this has been a successful source of cheap deposits for GS. Despite having an institutional / “white shoe” brand in the investment banking and trading world, GS’s Apple Card has been a disappointment.”
8. Johnson & Johnson (NYSE:JNJ)
Year-to-Date Share Price Performance as of October 11: -12.35%
Number of Hedge Fund Holders: 88
Ranked 8th on our list of the worst performing Dow stocks is Johnson & Johnson (NYSE:JNJ). The company engages in global research, development, manufacturing, and sale of diverse and innovative products in the healthcare sector. Johnson & Johnson (NYSE:JNJ)’s shares fell following a U.S. judge's decision against the company, rejecting a bankruptcy case from its subsidiary, LTL Management. This marks the second unsuccessful attempt by Johnson & Johnson (NYSE:JNJ) to handle talc-related lawsuits by creating a new entity and declaring bankruptcy. These legal actions have claimed that the company's talc products, including baby powder, occasionally contained asbestos and were linked to different cancer types, such as mesothelioma and ovarian cancer.
As per Insider Monkey’s second quarter database, 88 hedge funds were bullish on Johnson & Johnson (NYSE:JNJ), compared to 86 in the prior quarter. Ray Dalio’s Bridgewater Associates is a significant position holder in the company, with approximately 3.2 million shares worth $526.59 million.
ClearBridge Large Cap Value Strategy made the following comment about Johnson & Johnson (NYSE:JNJ) in its first quarter 2023 investor letter:
“The tech-dominated quarter was a headwind for both defensive and cyclical sectors, with shares of health care holdings such as UnitedHealth Group (UNH), Elevance (ELV) and Johnson & Johnson (NYSE:JNJ) declining after a strong 2022.”
7. Honeywell International Inc. (NASDAQ:HON)
Year-to-Date Share Price Performance as of October 11: -12.55%
Number of Hedge Fund Holders: 61
Ranked 7th among the worst performing Dow stocks, Honeywell International Inc. (NASDAQ:HON) functions as a global diversified technology and manufacturing company. Its operations are divided into four segments – Aerospace, Honeywell Building Technologies, Performance Materials and Technologies, and Safety and Productivity Solutions. On September 29, Honeywell International Inc. (NASDAQ:HON) declared a $1.08 per share quarterly dividend, a 4.9% increase from the previous dividend of $1.03. It is to be paid on December 1 to shareholders of record as of November 10.
The drop in revenue is mainly because of the effects of the Covid-19 pandemic on the company's operations, particularly in the Aerospace sector. Commercial airlines, which were seriously affected by the pandemic, had a negative impact on the company's overall performance since the pandemic started. Additionally, the company's decision to separate its turbocharger and HVAC businesses also affected the revenue growth.
According to Insider Monkey’s second quarter database, 61 hedge funds were bullish on Honeywell International Inc. (NASDAQ:HON), up from 58 in the prior quarter. John Overdeck and David Siegel’s Two Sigma Advisors is a significant shareholder of the company, with 1.96 million shares worth approximately $406.4 million.
ClearBridge Large Cap Value Strategy made the following comment about Honeywell International Inc. (NASDAQ:HON) in its first quarter 2023 investor letter:
“We also used the strength in the market to sell our position in diversified industrial company Honeywell International Inc. (NASDAQ:HON). While a recovery in its commercial aerospace business remains a tailwind, we believe the valuation is extended and industrial demand continues to soften.”
6. The Travelers Companies, Inc. (NYSE:TRV)
Year-to-Date Share Price Performance as of October 11: -13.21%
Number of Hedge Fund Holders: 41
The Travelers Companies, Inc. (NYSE:TRV) offers different types of insurance products and services for businesses, governments, associations, and individuals in the United States and worldwide. The company functions through three segments – Business Insurance, Bond & Specialty Insurance, and Personal Insurance. On June 20, 2023, the company experienced a 6% drop in year-to-date share price performance, mainly owing to the loss in net investments. This, coupled with higher costs, particularly with claims and expenses rising unfavorably over the year, the company experienced a 22% decline in net income.
According to Insider Monkey’s second quarter database, 41 hedge funds were bullish on The Travelers Companies, Inc. (NYSE:TRV), down from 45 in the previous quarter. Cliff Asness’ AQR Capital Management is the largest shareholder of the company, with 794,289 shares worth $136.7 million.
Like Verizon Communications Inc. (NYSE:VZ), 3M Company (NYSE:MMM), and Walgreens Boots Alliance, Inc. (NASDAQ:WBA), The Travelers Companies, Inc. (NYSE:TRV) is one of the worst performing Dow stocks YTD.
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Disclosure: None. 15 Worst Performing Dow Stocks YTD is originally published on Insider Monkey.