Why Citigroup, Accenture, and Windstream Corporation Are Today’s 3 Worst Stocks

Dividends, declining businesses, and the Fed's raw power over banks sent today's three worst stocks skidding

Mar 27, 2014 at 8:37PM
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Although all three major U.S. indices lost ground on Thursday, the mood on Wall Street wasn't "bearish" by any means, and only 49% of publicly traded companies declined. While the overall losses were moderate by most standards, three poor performers still managed to lose investors gobs of money. Citigroup (NYSE:C), Accenture (NYSE:ACN), and Windstream Corporation (NASDAQ:WIN) all finished at the most abject depths of the S&P 500 Index (SNPINDEX:^GSPC) Thursday, as the benchmark lost just three points, or 0.2%, to end at 1,849.

Citigroup, which seems to go belly up and then get bailed out once every decade or two for good measure, lost 5.4% Thursday. It seems Uncle Sam's starting to catch on to Citigroup's eternally recurring moral hazard (Nietzsche meets Gekko, anyone?), and the Federal Reserve, for one, is sick of it. The Fed denied Citigroup's request to boost its dividend and go through with a $6 billion share buyback due to the bank's recent stress test, in which Citigroup failed to allocate for potential losses correctly.

Stock in consulting and IT company Accenture shed 5% today, and when you hear what's been amiss at the company, you'll want to sell it, too, even if you don't own shares. First of all, the company missed both revenue and earnings expectations in the most recent quarter. Then, Accenture dropped the bomb: Its pride and its joy, its bread and its butter, its sun and its moon -- the consulting business -- probably won't grow this year, and may even see a decline. Consulting brings in more than 50% of Accenture's revenue currently, and its consulting business has fallen in six of the last seven quarters. That part of its business is dying -- if you can't consult your clients into keeping you, either they don't need you, or your consulting isn't effective (or both). 

Finally, Windstream Holdings stock slumped 4.2% today. Shares of the telecom services company have been extremely stable in the last year, a stability that often comes with dividends as high as Windstream's. It dishes out nearly 12% annually to its shareholders, and four times a year, its stock stumbles when investors know they can get the next quarterly dividend and run with it. Today was one of those rare "ex-dividend" dates, where people cashing in on the $0.25 quarterly dividend sold the stock off to the tune of $0.25, or 3%, with the rest of the losses perhaps being due to worries about the high dividend, even though it looks sustainable for the time being.

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John Divine has no position in any stocks mentioned. The Motley Fool recommends Accenture. The Motley Fool owns shares of Citigroup. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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