These Are The 5 Worst Dow Jones Stocks Of 2018

Goldman Sachs (GS) is the worst Dow Jones stock of the year, followed by IBM (IBM), DowDuPont (DWDP), Caterpillar (CAT) and 3M (MMM) as the overall Dow Jones industrial average ended its worst year in a decade.

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By the end of trading on Monday, the Dow Jones stock index was down 5.6% for the year. But Goldman Sachs, DowDuPont, IBM, 3M and Caterpillar posted declines well into the double-digit range, putting them at the bottom of the 30-stock index.

No. 1 Worst Dow Jones Stock: Goldman Sachs

In a year of extreme stock market gyrations, the investment banking giant has seen its share of volatility. Legal woes and trading revenue weakness sent Goldman Sachs stock crashing 34.4% for the year and 25.5% for Q4.

Recent stock losses came as Goldman Sachs saw more exposure to the 1MDB scandal, which has prompted the Malaysian government to seek $ 7.5 billion from the bank. In addition, it faces potential fines in the U.S. in relation to the failed bond fund.

Meanwhile, worries about slowing global growth and a flattening of the yield curve have been hitting financial stocks broadly. Goldman’s earnings are expected to come in flat next year, down from an estimated 28% surge this year.

But the company plans to boost revenue by $ 5 billion over three years amid outreach to new customer segments via its Marcus high-yield savings accounts, consumer mobile app and other digital products.

And some analysts consider Goldman Sachs stock oversold, while Warren Buffett’s Berkshire Hathaway (BRKB) bumped up its stake in the banking giant this year.

No. 2 Worst Dow Jones Stock: IBM Stock

IBM stock dumped 25.9% for 2018 and 24.85% in Q4. That follows a painful 2017, which saw it trail General Electric (GE) alone among underperforming Dow Jones stocks. (GE has since been ousted from the Dow Jones industrial average.)

Worries about IBM’s Cognitive Solutions software unit, which includes the Watson AI business, have hurt the tech giant.

A $ 34 billion Redhat purchase contributed to the stock’s slide. Analysts say the deal could see IBM rack up debt, while IBM sees cloud computing as a growth driver.

No. 3 Worst Dow Jones Stock: DowDuPont

The chemical conglomerate has tanked 24.9% in 2018 and 16.8% over the past three months.

It emerged in 2017 from the merger of Dow Chemical and DuPont, and plans a three-way split by mid-2019.

But fears of a global economic downturn have weighed, and a narrowing of the oil-to-gas spread is a potential headwind for DowDuPont’s basic chemicals business.

No. 4 Worst Dow Jones Stock: Caterpillar

The construction and mining equipment maker dived 19.4% for the year and 16.7% in Q4.

The U.S.-China trade dispute, including tit-for-tat tariffs, has hurt investor sentiment. In Q4, Caterpillar said it expects higher material and freight costs, including tariffs. Signs of little to no Chinese manufacturing growth added to Caterpillar’s pains.

Meanwhile, the company faces competition at home and abroad, from both existing rivals and fast-growing upstarts such as China’s Sany, according to Morningstar.

No. 5 Worst Dow Jones Stock: 3M

The U.S. conglomerate lost 19.1% in 2018, sliding 9.6% in Q4. It suffered, like Caterpillar and other industrial heavyweights, from exposure to China. An earnings miss and lower full-year guidance also hurt 3M stock in the final quarter.

In July, company veteran Michael Roman replaced Inge Thulin as CEO. Then in December, 3M agreed to buy the technology business of M*Modal for $ 1 billion. Management described the deal as dilutive to EPS by 10 cents next year, triggering another leg down for 3M stock.

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