In this article, we discuss 15 worst performing dividend stocks year-to-date. You can skip our detailed analysis of dividend stocks and their performance this year, and go directly to read 5 Worst Performing Dividend Stocks YTD.
In 2023, dividend-paying stocks have not performed as well as other types of investments because many investors are showing a stronger preference for technology stocks. However, investment patterns change over time due to shifts in market sentiment and various economic factors. The US economy is uncertain this year due to unpredictable inflation. The latest CPI report showed that inflation increased in August from the same period last year, reversing the recent trend of slowing inflation. Compared to a year ago, it went up by 4.3%, which is in line with expectations and represents the smallest increase in almost two years.
Because of the continuing economic uncertainty, the growth of dividends in the US slowed down during the second quarter of 2023. This deceleration in the country’s dividend growth resulted in a total of $148 billion worth of payouts, up modestly by 4.6% year-on-year when considering the core performance after accounting for lower one-time special dividends, according to the latest report by Janus Henderson. In general, dividend stocks haven’t performed that well this year. The S&P 500 Dividend Aristocrats Index, which tracks the performance of companies with at least 25 consecutive years of dividend growth, gained 2.33% this year so far, underperforming the tech-heavy NASDAQ, which delivered a 33.06% return to shareholders since the start of 2023.
As the ongoing inflationary period continues to extend its course, dividend stocks can be a reassuring choice for concerned investors. Historical analysis also shows that dividend stocks have given a solid performance during periods of economic downturns. This is because dividend stocks are a defensive investment choice these equities tend to raise their dividend payments over time, which can help offset the effects of rising prices. In one of our previous articles, we cited Fidelity Investments’ data and mentioned that dividends accounted for more than half of the market's returns in periods of high inflation. The report also noted that in the 1940s, 1960s, and 1970s, dividends made up 67%, 44%, and 73% of market returns, respectively. In those decades, when inflation averaged over 5%, total returns were below 10%.
As mentioned above, tech stocks have dominated the market this year, surpassing dividend-paying companies. Even some of the biggest dividend companies such as The Coca-Cola Company (NYSE:KO), Colgate-Palmolive Company (NYSE:CL), and AbbVie Inc. (NYSE:ABBV) have also reported negative returns in 2023 so far. In this view, we will discuss some of the worst performing dividend stocks this year.
For this list, we examined the worst-performing stocks of 2023 and selected dividend-paying stocks that have experienced substantial declines in their share prices so far this year. We started with a list of fifty companies by filtering them based on share price drops. From the resultant list, we picked the top 15 dividend stocks that performed the worst and arranged them in ascending order based on their share price drops as of September 13.
Year-to-Date Share Price Drop as of September 13: 31.16%
NextEra Energy Partners, LP (NYSE:NEP) is an American publicly traded limited partnership that operates in the energy sector, with a specific focus on renewable energy and infrastructure. In the first half of the year, the company's funding strategy affected its share price significantly. Even though it announced a new plan to address these concerns, the share price continued to face challenges. The stock is down by 31.16% year-to-date, which makes it one of the worst performing dividend stocks on our list.
In addition to NEP, some prominent dividend companies like The Coca-Cola Company (NYSE:KO), Colgate-Palmolive Company (NYSE:CL), and AbbVie Inc. (NYSE:ABBV) also declined this year.
At the end of Q2 2023, 23 hedge funds tracked by Insider Monkey reported having stakes in NextEra Energy Partners, LP (NYSE:NEP), compared with 24 in the previous quarter. The collective value of these stakes is over $285 million.
Year-to-Date Share Price Drop as of September 13: 31.17%
Comerica Incorporated (NYSE:CMA) is an American financial services company that provides a range of banking and financial products and services to its consumers. The stock has lost about 31% since the start of the year, which makes it one of the worst performing dividend stocks on our list. One of the main reasons for the stock's decline is the uncertainty in the regional banking sector, following the collapse of big banks earlier in March.
Comerica Incorporated (NYSE:CMA) currently pays a quarterly dividend of $0.71 per share and has a dividend yield of 6.22%, as recorded on September 13.
As of the close of Q2 2023, 46 hedge funds tracked by Insider Monkey reported owning stakes in Comerica Incorporated (NYSE:CMA), the same as in the previous quarter. The overall value of these stakes is over $658 million. Among these hedge funds, Citadel Investment Group was the company's leading stakeholder in Q2.
Year-to-Date Share Price Drop as of September 13: 33.16%
KeyCorp (NYSE:KEY), a regional bank holding company, declined by 33.16% since the start of 2023. Just like CMA, the fall in KeyCorp's share price is mainly due to the banking crisis that started in March and has affected the banking sector overall. Due to this, KEY is one of the worst-performing dividend stocks on our list.
KeyCorp (NYSE:KEY) has been raising its dividends for 12 consecutive years and currently offers a quarterly dividend of $0.205 per share. As of September 13, the stock has a dividend yield of 6.87%.
The number of hedge funds tracked by Insider Monkey owning stakes in KeyCorp (NYSE:KEY) jumped to 49 in Q2 2023, from 34 in the previous quarter. The consolidated value of these stakes is over $334 million.
Year-to-Date Share Price Drop as of September 13: 33.3%
Pfizer Inc. (NYSE:PFE) is a New York-based pharmaceutical and biotech company. Though the company has a strong dividend growth streak of 13 years, the share price still declined by 33.3% in 2023 so far. The negative returns are due to the uncertainty around the company's Covid-19 vaccine sales. In its most recent quarter, the company announced a 54% year-over-year decline in its revenues given the falling demand for its pandemic-related products.
As of the close of Q2 2023, 73 hedge funds tracked by Insider Monkey reported having stakes in Pfizer Inc. (NYSE:PFE), which remained unchanged from its previous quarter. The consolidated value of these stakes is over $1.5 billion. With over 17.4 million shares, Citadel Investment Group was the company's leading stakeholder in Q2.
Year-to-Date Share Price Drop as of September 13: 34.7%
An American global apparel and footwear company, V.F. Corporation (NYSE:VFC) is next on our list of the worst performing dividend stocks this year. Since the start of 2023, the stock has fallen by 34.7%. In December 2022, the company's chief executive officially stepped down from his presidency. In the most recent quarter, it gave a modest outlook for the fiscal year due to ongoing weaknesses in its wholesale business. In February this year, the company also slashed its dividend by 41.2% and currently pays a quarterly dividend of $0.30 per share and has a dividend yield of 6.83%.
At the end of June 2023, 26 hedge funds in Insider Monkey's database reported having stakes in V.F. Corporation (NYSE:VFC), down from 28 in the previous quarter. The collective value of these stakes is over $426.2 million.
10. International Flavors & Fragrances Inc. (NYSE:IFF)
Year-to-Date Share Price Drop as of September 13: 35.5%
International Flavors & Fragrances Inc. (NYSE:IFF) is an American company that creates and produces a wide range of flavors, fragrances, and other related ingredients. The stock has been experiencing a decline since the start of 2023 due to financial uncertainty and slow volume growth. In 2023 so far, the stock has fallen by 35.5%, which makes it one of the worst dividend stocks on our list.
The number of hedge funds tracked by Insider Monkey owning stakes in International Flavors & Fragrances Inc. (NYSE:IFF) grew to 46 in Q2 2023, from 41 in the previous quarter. The collective value of these stakes is over $2.28 billion.
Year-to-Date Share Price Drop as of September 13: 37.3%
UGI Corporation (NYSE:UGI) is a natural gas distribution company that also offers other related services to its consumers. The stock is down by 37.3% since the start of 2023 due to its uncertain financial position. In the most recent quarter, the company's revenue fell by 18% on a year-over-year basis and also missed analysts' estimates by $150 million. It is among the worst-performing dividend stocks on our list.
According to Insider Monkey's database of Q2 2023, 22 hedge funds owned stakes in UGI Corporation (NYSE:UGI), up from 20 in the previous quarter. The collective value of these stakes is over $180.5 million.
First Pacific Advisors mentioned UGI Corporation (NYSE:UGI) in its Q2 2023 investor letter. Here is what the firm has to say:
“UGI Corporation (NYSE:UGI) owns gas utilities and pipelines in Pennsylvania and West Virginia and the largest propane distribution businesses in the United States and Europe. This is our kind of company – despite the disparate parts, UGI grows earnings at a relatively steady high single digit rate over the long term while distributing excess cash through dividends.25 Shares are down due to a collection of short-term issues – driver shortages at the US propane business, losses from fixed priced contracts at the European energy marketing business, lower propane volumes in Europe and warmer weather. We believe the company is attractive at less than 10x earnings and we have been incrementally adding.”
Year-to-Date Share Price Drop as of September 13: 38.6%
The AES Corporation (NYSE:AES) is a global energy company that operates in the power generation and utility sector. The company's balance sheet and increasing debt have been gaining a lot of attention from analysts this year. As of June 30, it had a net debt of over $24.5 billion, compared to shareholders' equity of $6.04 billion. The stock has generated negative returns of 38.6% since the beginning of 2023, which makes it one of the worst performing dividend stocks on our list.
At the end of Q2 2023, 36 hedge funds in Insider Monkey's database owned investments in The AES Corporation (NYSE:AES), down from 44 in the previous quarter. The consolidated value of stakes owned by these hedge funds is over $946.7 million.
Year-to-Date Share Price Drop as of September 13: 42.5%
Macy's, Inc. (NYSE:M) is next on our list of the worst performing dividend stocks on our list. The American department store chain has been experiencing retail weaknesses since the start of the year and it also slashed its fiscal year guidance after its Q1 report. The stock has delivered a negative return of 42.5% in 2023 so far.
As of the close of Q2 2023, 33 hedge funds tracked by Insider Monkey reported having stakes in Macy's, Inc. (NYSE:M), growing from 28 in the previous quarter. The consolidated value of these stakes is over $675 million.
Year-to-Date Share Price Drop as of September 13: 43.02%
Medical Properties Trust, Inc. (NYSE:MPW) is an American real estate investment trust company that specializes in healthcare-related properties. The significant drop in the company's share price happened because Steward Health Care System ended its leases for five Utah hospitals in May and then leased them to CommonSpirit. Additionally, there was a $95 million rent write-off, which also contributed to the decline. The stock is down 43.02% year-to-date, which makes it one of the worst-performing dividend stocks on our list.
The Coca-Cola Company (NYSE:KO), Colgate-Palmolive Company (NYSE:CL), and AbbVie Inc. (NYSE:ABBV) have also reported negative returns this year so far.
As of the end of the June quarter of 2023, 20 hedge funds in Insider Monkey's database held stakes in Medical Properties Trust, Inc. (NYSE:MPW), with a total value of roughly $170 million.
