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Dividend University

Dividend Stocks Down During the Bull Market and Why

Shauna O'Brien Sep 22, 2014


Over the last five years, the overall market has been great for investors. Despite fears of a correction, the bull market continues to survive, but not all investors are benefiting.

No matter how well the market is performing, there will always be stragglers along the way. Below are 10 big-name dividend stocks that have fallen short of the bull market in 2014.


Coach (COH)


Luxury accessory company Coach (COH) hit its high in 2012, but it’s been moving downward ever since. The company began 2014 with a bad start when it released its estimate-missing second quarter financial results in January 2014. This earnings miss caused the company’s share price to fall to a three-month low.

By the next quarter, Coach was in even worse shape. Shares plummeted after the company reported yet another sales miss.

In June, Coach announced that it would close 70 of its stores. It also cut its outlook. After all of the bad press on Coach, the company has been in a constant downfall, unable to recover.


Whole Foods Market (WFM)


Unlike Coach, which saw a number of stock price falls, the majority of Whole Foods Market’s (WFM) stock collapse can be targeted to just one day. On May 6, 2014, the stock lost a quarter of its value after the company reported its second quarter earnings.

The stock collapsed as the company reported an annual outlook that was below analysts’ estimate. Since WFM’s fall, it has not been able to recover.


Staples (SPLS)


Staples (SPLS) has struggled over the last few years due to weak sales. The company saw two sharp one-day declines in 2014. On March 6, the company reported earnings that fell below expectations. In addition to the earnings miss, the company also reported that it planned to close 225 of its stores by 2015.

The company’s second major dip came on May 19, when it missed estimates and reported a weak outlook for the first quarter.

As it continues with its turnaround, Staples has become a takeover target in the office supply retail industry. There have been several rumors of a possible merger or takeover involving Staples.


Mattel (MAT)


Toy maker Mattel (MAT) was on a bull run since its IPO in 2009, but it rapidly began losing value in January 2014 when it reported earnings that missed estimates and weak sales in the Americas.

Shares remained flat until the stock price was struck again when MAT released its second quarter earnings in July. The company reported a 99% drop in operating income and a 60% drop in net income.


Avon (AVP)


Discount beauty supply company Avon (AVP) has been struggling since 2009. The company has been attempting to turn itself around by cutting costs and improving performance.

Despite its turnaround efforts, AVP has been continuously posting low earnings or net losses, driving its share price downwards.


General Motors (GM)


General Motors (GM) has been struggling in 2014 due to its massive amount of vehicle recalls and negative press.

The automobile company has recalled over 25 million vehicles in 2014 and has continued to be criticized for its actions regarding its ignition switch defect, which killed over a dozen people.


Las Vegas Sands (LVS)


Resort company Las Vegas Sands (LVS) was heading upward following the 2008 recession, but things have been going south in 2014 due to fears of weak revenue and a crackdown on corruption in the casino industry.


Nu Skin Enterprises (NUS)


Nu Skin Enterprises (NUS) was on a bull run after the recession. The stock surged in 2013, but later collapsed after a Chinese newspaper reported that the company was running an illegal pyramid scheme.

The company’s stock price has continued to fall, losing over half of its value.


Best Buy (BBY)


Electronic retailer Best Buy (BBY) made its recovery after the 2008 recession, but has struggled along the way. In January 2014, the stock collapsed after its holiday sales fell below analyst expectations.

Although the stock price has been trending upward, Best Buy has struggled to compete with rivals such as Amazon (AMZN).


Peabody Energy


Coal company Peabody Energy (BTU) began a bull run in 2008, but the stock began to decline in 2011. The company has suffered as the future of the coal industry remains questionable.

BTU has also struggled with sluggish sales and increased public and regulatory scrutiny for the industry.


The Bottom Line


There is no definite answer to how long the bull market will last or what stocks will continue to see an upside. Investors should always make sure that they do their homework on stocks before making a purchase. There will always be underperformers in a bull market.

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