2020 has been one of the craziest years on record for the Dow Jones Industrials (DJINDICES: ^ DJI). After suffering a lightning-fast bear market in February and March due to the COVID-19 pandemic, the Dow has recovered almost all of its losses.
Other benchmark benchmarks have already set new record highs, but the Dow still has a long way to go. This is in large part due to some terrible performance from some of the components of the DJIA, including what used to be the most influential stock on average. Below we will reveal the three worst performers in the Dow so far in 2020 to see if now is the right time to buy shares of these wounded companies.
^ DJI data by YCharts.
Army flying
Boeing (NYSE: BA) has been the worst performer in the Dow, losing almost half of its value in 2020. Helping set the stage for the arrival of the aviation manufacturer were the misery the company had in 2019, as it most of the year went by with its new 737 MAX line of aircraft crashing to the ground in the wake of two fatal accidents.
Despite best efforts to re-fly the planes, regulators at the U.S. Federal Aviation Administration and similar bodies abroad were not so interested in a speedy resolution.
Image source: Boeing.
However, the situation held up well until the COVID-19 pandemic, which brought air travel closer and called into question the future viability of the aviation business models. Even now, more than six months after the coronavirus began spreading around the world, airlines have a huge uncertainty.
As buyers of Boeing aircraft, carriers must be healthy for the aircraft manufacturer to be successful. Until there is a permanent resolution to the coronavirus crisis, Boeing could have trouble keeping any strong bounce from its worst levels.
Lose energy
ExxonMobil (NYSE: XOM) has also fallen, falling by almost 40% in the first 7 1/2 months of the year. Relatively low oil prices had plagued the entire energy industry for years, but by 2020 it emerged that the market was finally starting to turn the corner. With its massive operations and various set of oil-producing assets, ExxonMobil was better positioned than many of its peers to deal with a sustained period of below normal regular prices.
However, no one was prepared for the impact of the pandemic on energy demand. A halt to almost all industrial activity led to a massive rumble of oil in the energy markets, and short sent prices to negative ground because storage did not prove sufficient. Those days are over, but oil remains quirky at $ 40 a barrel.
So far, ExxonMobil has maintained its dividend, but many are worried that the impact on profits could hurt even the oil giant’s prospects. Until the world economy gets back on its feet and the demand for energy goes up, the ExxonMobil stock market could continue.
Play defense – and fail
Finally, Raytheon Technologies (NYSE: RTX) awaits as the third worst performer in the Dow in 2020. The defense contractor entered the Dow as a result of Raytheon’s merger with the United Technologies aviation arm, creating a powerhouse for defense and aviation.
The problem is that the combination came at a terrible time for the aviation industry. As noted above with Boeing, dire circumstances have arisen from the pandemic in the long-term demand for commercial aircraft. Raytheon’s defense company is less vulnerable to the cases of the commercial aerospace industry, but even government farmers face financial challenges. Raytheon is likely to survive the crisis intact, but it may be some time before things return to normal for the air and defense industry.
Expect a longer wait
As attractive as these three blue chip stocks may look from a valuation point of view, all three are looking forward to tough times. It seems that you have a better chance of buying these shares than you are getting now, especially without guarantees as to when the problems they are having will start to disappear.
