Nothing went right for these stocks.
The best stocks of the year get a lot of attention because they dominate the headlines with stories of success and growth. And while there are plenty of companies in the Standard & Poor’s 500 index that had a lot of good news to crow about, not all companies did so well in 2017. Some dividend stocks that were thought of as stable income producers have actually lost investors a great deal of money. Here are the 10 worst performers among S&P 500 stocks that pay a dividend of 2 percent or greater.
Hess Corporation (NYSE: HES)
Oil prices have stabilized after a very tough run from 2014 to the end of 2016. However, the pain hasn’t stopped for many energy companies as they have had to adjust to the “new normal” lately. At just $14 billion in market value, Hess Corp. is one of the smaller explorers out there and simply doesn’t have the deep pockets or scale that other energy companies do. As such, it has been forced to rely on cuts in production and spending to keep operations running. That hasn’t been enough, and shares have been punished in 2017 — and by all indications, CEO John Hess could lose his job shortly as a result.
Sector: Energy
Yield: 2.2 percent
2017 performance: -24 percent
PG&E Corporation (PGE)
California wildfires took their toll on residents and businesses in many ways, and one of the biggest victims in 2017 was regional utility PG&E Corp. The San Francisco-based company deals with electricity and natural gas delivery across the state and has seen its infrastructure and operations decimated by the fires. Worse, reports in October indicated that PG&E was in some way responsible for the fires thanks to poorly maintained equipment. The company actually suspended its dividend in the near term on fears of liability risks.
Sector: Utilities
Yield: 4.7 percent, however 2018 payouts are on hold until further notice
2017 performance: -26 percent
Macy’s Inc. (M)
Retailer Macy’s has undeniably seen better days. Shares have been in a nearly constant decline since mid-2015 thanks to decaying sales and disappointing store traffic, and that trend has continued in 2017. Despite a big brand, the brick-and-mortar merchant just can’t seem to compete in the age of e-commerce. What’s really depressing is that Macy’s is seeing these declines even amid record consumer confidence across the U.S. The dividend hasn’t yet been cut, but shareholders should be wary that continued pressures on the business will eventually result in smaller payouts.
Sector: Retail
Yield: 5.9 percent
2017 performance: -28 percent
Kimco Realty Corp. (KIM)
Related to the trouble at brick-and-mortar stores, Kimco Realty Corp. is a strip mall operator across the U.S. that relies on anchor stores to lease the biggest chunk of its properties. In an age when many big-box retailers including Macy’s, Sears Holdings Corp. (SHLD) and others are struggling, some investors have been pessimistic about the future outlook for KIM stock. The dividend of 27 cents a share is actually higher in 2017 than it was last year.
Sector: Real estate
Yield: 6.1 percent
2017 performance: -28 percent
Newell Brands Inc. (NWL)
Newell Brands is the company behind various products including Rubbermaid plastic containers, Coleman camping gear, Bicycle playing cards and Sharpie markers. These disparate businesses are unrelated, and thus difficult to manage together in an efficient operation the way other companies do when mashing up various brands. Furthermore, the company has taken on a lot of debt and restructuring costs in recent years thanks to even more brands joining the fold. It’s a lot to digest, and shareholders haven’t been happy about the cumbersome mashup of brands.
Sector: Consumer discretionary
Yield: 3 percent
2017 performance: -31 percent
Apache Corp. (APA)
Natural gas has been in a free fall lately. Fracking and an oversupply of gas in general has depressed pricing, a milder winter decreased demand and the strong U.S. dollar created a headwind for energy commodities across the board. That softness in gas prices has meant a world of hurt for leading natural gas explorer Apache Corp. Why bring more fields online if pricing is weak and demand is soft? Instead, the company simply suffers with declining sales and profits — and a declining share price as a result.
Sector: Energy
Yield: 2.3 percent
2017 performance: -32 percent
Foot Locker (FL)
Foot Locker was hit by a double whammy in 2017. For starters, shares were at an all-time high at the very end of 2016. But unfortunately, earnings showed momentum that was not sustainable and earnings actually declined in the spring, sparking a deep sell-off that continued as metrics steadily softened. Like Macy’s, it’s simply too hard to hold the line at a retailer like this in the age of e-commerce. FL stock cratered from nearly $80 to a low of $30 in November. Shares stabilized since then, but the sell-off is still pretty ugly considering where FL was to start the year.
Sector: Retail
Yield: 2.6 percent
2017 performance: -33 percent
Signet Jewelers (SIG)
What could be worse than being a specialty retailer that has been challenged by online competition? How about an investigation by consumer watchdogs? That’s the case with Signet Jewelers. The company is under federal scrutiny for allegedly providing potentially predatory in-store financing on its engagement rings and necklaces, which has scared investors big-time lately. The result made an already bad sell-off even worse late in 2017.
Sector: Retail
Yield: 2.2 percent
2017 performance: -40 percent
General Electric Co. (GE)
General Electric burned dividend investors in 2009, during the financial crisis, by slashing its quarterly payouts from 31 cents per share to 10 cents. Thanks to struggles in the finance arm of the business, shares plummeted from about $40 to less than $10. Things theoretically improved in the intervening years, with GE stock reclaiming the $30 mark in 2016 and upping its payout to 24 cents. But that proved to be a head fake, as the challenges of being spread across way too many businesses and simply not competing effectively is hurting GE stock.
Sector: Industrials
Yield: 2.7 percent
2017 performance: -45 percent
Scana Corp. (SCG)
Utilities are typically a pretty safe bet because there’s a lack of competition and a reliable business model. However, South Carolina’s Scana Corp. has been one of the worst performers on Wall Street this year after a big nuclear power project went south, adding increased costs and bad headlines to the company. The worst of it isn’t just that a nuclear plant initially approved roughly a decade ago has finally been scrapped this year after controversy and overruns. There are also accusations that insiders dumped shares before the worst of the trouble.
Sector: Utilities
Yield: 6.3 percent
2017 performance: -47 percent
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The 10 Worst S&P 500 Dividend Stocks of 2017 originally appeared on usnews.com
