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The Dow Jones Industrial Average (DJIA) will finish 2024 with a positive return. The index has climbed about 24% this year. This will be the fourth positive return in the last five years, with 2022 the only down year.

The three worst-performing Dow Jones Stocks in 2024 were Boeing (BA), Nike (NKE), and Amgen (AMGN), which all have negative returns. Amgen was in the Dogs of the Dow 2024 and will be so again in 2025. The best performing DJIA stocks were Walmart (WMT), American Express (AXP), and Goldman Sachs (GS). Nvidia had a greater total return for 2024 but was added to the Average only in November.

Market Overview

This year is a good one from the market’s perspective. The U.S. Federal Reserve lowered rates three times in 2024 and is planning for two decreases in 2025. Inflation has declined substantially and has settled between 2% and 3% annually. It’s not yet at the 2% target, but the values are decent. The Consumer Price Index (CPI) and the Personal Consumption Expenditures (PCE) Price Index are below 3%. The CPI is 2.7%, while the PCE is 2.8% for 2024.

Although housing and auto sales are still below their pre-pandemic highs, the stock market responded positively. The Nasdaq 100 is up 28% after a 49% gain in 2023, fueled by growth in Artificial Intelligence (AI) after the passage of President Biden’s CHIPS Act. The Dow Jones Industrials has gained a respectable 14% while the broader S&P 500 Index increased 27%. Both the Nasdaq 100 and S&P 500 have been setting records in 2024. Besides the stock market, risk-based alternative assets soared.

The past year contained further good news, including positive Gross Domestic Product (GDP) numbers, a still-low unemployment rate, and job growth. Despite the naysayers trying to convince people everything is terrible, the opposite is seemingly true. However, on the negative side, manufacturing continues to struggle. Moreover, a recession did not happen in 2024, despite general sentiment aligning with my prediction at the end of 2023. However, all bets are off in 2025.

The Dow Jones Industrial Average did not perform well in relative terms. This year, the DJIA climbed roughly 14.1%, with dividends reinvested after accounting for index changes. The 24% return shown below does not account for changes. This is worse than the Nasdaq Composite (+32.3%), the S&P 500 Index (+26.8%), and the Russell 2000 (+27.2%), as seen in the chart from Stock Rover*.

Overall, dividend stocks did not do as well as tech and growth stocks for the second year in a row.

Source: Stock Rover*

3 Worst Performing Dow Jones Stocks in 2024

The three worst-performing Dow Jones Stocks in 2024 were Boeing (BA), Nike (NKE), and Amgen (AMGN), based on our watch list in Stock Rover*. Boeing is on the list for the third time in five years. Nike and Amgen have not yet been on the list.

Source: Stock Rover*

We summarize each equities’ challenges in 2024 and the positives as the basis for further research.

Boeing

Boeing (BA), founded in 1916, is a global aerospace and defense giant. It designs, manufactures, and services commercial and military airplanes, defense, space, and security systems. It makes the well-known 737, 767, 777, 787, C-17 Globemaster, F/A-18, etc. Boeing holds a significant global market share in commercial aviation, particularly in large aircraft segments. The company also operates the International Space Station (ISS), Starliner, and the Space Launch Systems (SLS) for NASA. It is the worst performing stock in the Dow Jones in 2024.

Total revenue was $77,794 million in 2023 and $73,293 million in the past twelve months.

Boeing has faced well-reported continuing difficulties with its 737 MAX platform, impacting deliveries and sales. In 2024, the 737 MAX faced additional scrutiny and delivery delays, impacting production rates and revenue. Supply chain disruptions and labor issues further complicate operations. These factors, combined with increased competition and rising costs, negatively impacted the company’s financial performance, leading to a decline in stock price. The COVID-19 pandemic exacerbated problems with the 737. In addition, the firm has faced challenges with the Starliner and SLS.

Revenue and earnings per share (EPS) have been impacted since 2019. In addition, the firm has experienced leadership changes with multiple CEOs. However, Boeing has a new CEO, and analyst consensus estimates indicate revenue growth and positive EPS in 2025.

Boeing cut its dividend to zero in 2020 and has not yet restored it. We are not expecting a dividend distribution until the firm demonstrates consistent profitability, which may take several years.

The firm is clearly in turnaround mode and the new CEO has much work to do. Competition is elevated, and Boeing’s recovery depends on successful operational execution.

(Click on image to enlarge)

Source: Portfolio Insight*

Nike

Nike, Inc., founded in 1964, is a global leader in athletic footwear, apparel, and equipment. Its iconic “Just Do It” slogan and Swoosh logo have become synonymous with sports and athletic performance. The slogan and logo are amongst the most well-known in retail. Nike’s product portfolio includes footwear, apparel, and accessories for various sports and activities, from running and basketball to soccer and training. Besides Nike, the company owns several subsidiary brands, including Converse, Air Jordan, Chuck Taylor, and Hurley. It is our second worst performing Dow Jones stock in 2024.

Total revenue was $51,362 million in 2024 and $48,978 million in the last twelve months.

In 2024, Nike faced several challenges that impacted its share price performance, causing it to drop by about 30%. Increased competition in athletic footwear from Hoka and On and apparel from Adidas, Under Armour, and Lululemon have affected sales and earnings per share. Next, supply chain disruptions caused by the pandemic impacted operations. Inflation has also caused headwinds because consumers have reduced discretionary spending. Lastly, Nike’s well-publicized attempt to shift to a direct-to-consumer (DTC) model adversely impacted relationships and its wholesale business.

That said, Nike is still the market leader with extremely well-known brands. The firm also continues to innovate for shoe models. Lastly, it spends a large sum of money on marketing and brand sponsorships with famous athletes. These strengths should allow Nike to overcome recent difficulties, especially with the new CEO.

According to Dividend Radar, Nike has increased its dividend for 23 consecutive years. As a result, the stock is a Dividend Contender. The dividend yield is the highest in a decade. The moderate payout ratio of ~43% and Stock Rover’s* calculated financial strength score of 73, Portfolio Insight’s* dividend quality grade of an ‘A,’ and the AA-/A1 investment credit rating indicate a safe dividend.

Because of the share price decline, investors should examine Nike for their portfolios. Alos, the dividend yield is the highest in a decade.

Source: Stock Rover*

Amgen

Amgen, founded in 1980, is a leading biotechnology company focused on discovering, developing, manufacturing, and selling therapeutics. Its product portfolio spans various areas, including oncology, cardiovascular disease, nephrology, bone health, and inflammation. Important brands include Enbrel (rheumatoid arthritis), Prolia/Xgeva (osteoporosis), Neulasta (neutropenia), Otezla (inflammation), and Repatha (cardiovascular).

Total revenue was $28,190 million in 2023 and $32,534 million in the last twelve months.

The share price is down because of increased competition, biosimilar erosion of key products, and pricing pressures. Several of Amgen’s key products are facing biosimilar competition. The firm has resorted to acquisitions because of its weaker pipeline, which has helped revenue. However, some drugs have not met expectations. Impending patent cliffs for Prolia in 2025 and Enbrel and Otezla in 2028 are additional headwinds.

That said, the firm has recently launched Lumakras (lung cancer) and Tezspire (asthma), which are expected to drive revenue growth. The company is also actively developing and launching its own biosimilars to offset competition from other biosimilars and take market share from rivals. The pipeline may also produce a blockbuster or two.

Despite the negative sentiment and the impending patent cliff, dividend growth investors like the company because of the 13-year streak of dividend increases. As a result, Amgen is on the list of Dividend Contenders. The conservative 46% earnings payout ratio and free cash flow exceeding the dividend requirements give confidence in the dividend safety. Furthermore, the dividend quality grade is a ‘B+,’ meaning it is in the 80^th percentile of equities tracked by Portfolio Insight.

The forward dividend yield is ~3.62%, and the stock trades at an earnings multiple of 13.4X. Investors may want to consider Amgen for their portfolios.

(Click on image to enlarge)

Source: Portfolio Insight*

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