June 28, 2018 / 9:48 PM / 5 months ago

UPDATE 1-Walgreens debuts as dog of the Dow

 (Adds dividend and "Dogs of the Dow" graphs)
    By James Thorne
    June 28 (Reuters) - The debut of Walgreens Boots Alliance
Inc         into the Dow Jones Industrial Average Index       
this week marks the worst performance of any new entrant in the
past 10 years, a Reuters analysis shows.
    The announcement that Amazon.com Inc          would acquire
online pharmacy PillPack sank shares in Walgreens and other drug
retailers on Thursday.             
    Walgreens shares were down more than 11 percent in the three
days after the company replaced General Electric Co        in
the index on Tuesday.              (Graphic: Three-day share
price performance following a Dow debut tmsnrt.rs/2Kr8hJk)
    The No. 2 U.S. pharmacy chain by market cap lost 9.9 percent
on Thursday, becoming the day's biggest loser of the 30 stocks
that comprise the Dow. It trimmed more than 44 points off the
index, which shrugged off early losses to close the day up 98
points, or 0.4 percent.
    While Walgreens performed like dog on debut, it would not
today qualify as one of the "Dogs of the Dow," under an
investment strategy based on selecting 10 Dow stocks at year end
with the highest dividend yields. 
    Walgreens' annual dividend is 2.4 percent, above the S&P
average yield of just under 2 percent, but below the 10 actual
"Dogs" with yields above 3 percent. 
    GE shares have risen more than 8 percent since the company
was dropped from the Dow, giving it the best three-day
performance among those that recently left the index.
    GE left the Dow with the lowest share price and least amount
of influence in the index, which is derived from an average of
stock prices among constituent companies.
    GE said on Tuesday that it would sell its oil-services firm
Baker Hughes          and spin off its healthcare business,
leaving a slimmed-down company focused on jet engines, power
plants and renewable energy.             
    Eight of the 11 most recent companies to join the Dow have
seen share prices decline in the three days following a debut.
    The second worst performing entrant was Mondelez
International Inc         , which saw shares fall 6.8 percent
after joining the index in September 2008 when it replaced
American International Group Inc        . 

    
 (Reporting by James Thorne
Editing by Alden Bentley and Lisa Shumaker)
  
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