GE's stock is the worst Dow performer since Immelt took charge – MarketWatch

This post was originally published on this site

It is no wonder General Electric Co.’s stock is rallying Monday, after the company said Chief Executive Jeffrey Immelt will retire after 16 years in charge: The industrial conglomerate’s stock has been the worst performer in the Dow Jones Industrial Average during his reign.

GE is the only component that remains from the time the Dow Jones Industrial Average DJIA, -0.17%   made its debut on May 26, 1896, with just 12 “smokestack” companies, as S&P Dow Jones Indices describes it. Of the Dow’s 30 current members, GE is one of only 21 that remain since Immelt became CEO on Sept. 7, 2001.

The stock GE, +3.58%  ran up 3.6% on Monday, to pace the Dow’s gainers on the day. But it has tumbled 27.0% since Immelt took charge, while the Dow has more than doubled (up 121.1%) over the same time. Read more about Immelt retiring.

The next-worse performer is the stock of AT&T Inc. T, +0.72% which changed its name from SBC Communications Inc. after completing its acquisition of AT&T Corp. The telecommunications company’s shares have slipped 4.7% during Immelt’s reign at GE.

Don’t miss: GE CEO adds caution to 2018 profit goal.

FactSet

Of the 19 stocks that have gained ground, 14 have more than doubled, seven have more than tripled and five others have quadrupled. The biggest gainer is McDonald’s Corp.’s stock MCD, -1.99% which has rocketed nearly five fold–up 395.6%–during the Immelt era, followed by Walt Disney Co. shares DIS, +1.34%  at 349.9%. (see table below for Dow’s performers, while Immelt was CEO of GE.)

“The GE story desperately needs a fresh face, not only to provide a vision of what GE will look like in 1, 2 and 5 years, but quite frankly, GE just needs a new messenger,” analyst Scott Davis at Barclays wrote in a note to clients dated Monday. “And we won’t know for several years whether investments like GE digital and 3D printing yield results. What we do know, however, is that Jeff Immelt has not put up the numbers.”

Over the past year, GE shares have shed 3.7%, while the SPDR Industrial Select Sector exchange-traded fund XLI, +0.37%  has climbed 20.7% and the Dow has run up 18.9%.

GE has completed $260 billion of asset sales since the GE Capital Exit Plan was announced in April 2015. It has also exited the plastics and insurance businesses and sold off NBC, while investing in power with the announced acquisition of Alstom Bharat Forge Power, and in oil and gas through the announced acquisition of Baker Hughes Inc.

The company also moved its headquarters to Boston from Stamford, Conn.

“Jeff has positioned the company incredibly well for the future,” said Jack Brennan, lead independent director of GE’s board. “The plan for the GE CEO transition process was set in 2011. With the GE Capital pivot behind us and the company’s transition to Boston complete, this is the ideal time for change.”

See also: GE and IBM have ‘unusual’ earnings reports in common.

Dow component (TICKER) Price when Immelt started Monday’s close Gain (loss)
General Electric Co. (GE) $39.66 $28.94 (27.0%)
AT&T Inc. (T) $41.00 $39.07 (4.7%)
Merck & Co. (MRK) $60.86 $64.39 5.8%
Intel Corp. (INTC) $25.89 $35.73 38.0%
IBM Corp. (IBM) $96.59 $155.18 60.7%
Wal-Mart Stores Inc. (WMT) $46.22 $79.24 71.44%
Coca-Cola Co. (KO) $24.87 $45.33 82.3%
Exxon Mobil Corp. (XOM) $40.90 $82.93 102.8%
DuPont & Co. (DD) $36.79 $82.14 123.3%
J.P. Morgan Chase & Co. (JPM) $37.00 $86.98 135.1%
Johnson & Johnson (JNJ) $55.73 $131.82 136.5%
Procter & Gamble Co. (PG) $36.89 $88.24 139.2%
Microsoft Corp. (MSFT) $27.70 $69.78 151.9%
American Express Co. (AXP) $30.29 $80.17 164.7%
United Technologies Corp. (UTX) $32.82 $119.88 265.3%
Home Depot Inc. (HD) $40.95 $152.18 271.6%
3M Co. (MMM) $50.39 $207.39 311.6%
Boeing Co. (BA) $45.18 $190.00 320.5%
Caterpillar Inc. (CAT) $24.43 $106.07 334.2%
Walt Disney Co. (DIS) $23.79 $107.04 349.9%
McDonald’s Corp. (MCD) $29.96 $148.47 395.6%
Dow Jones Industrial Average (DJIA) 9,605.85 21,235.67 121.7%
S&P Dow Jones Indices, FactSet, MarketWatch,
More from MarketWatch