For more than 126 years, the Dow Jones Industrial Average (^DJI -0.51%) has served as one of the most-watched barometers of Wall Street's health. When it debuted in May 1896, it had only 12 components, virtually all of which were industrial stocks. Today, it's a 30-component index comprised of historically profitable, mature, and diverse multinational businesses.

Yet the Dow has an inherent flaw -- it's a share price-weighted index. Instead of companies with larger market caps exerting greater influence over index price movements, such as we see occur in the S&P 500, stocks with higher share prices have more influence in the Dow. For instance, even though Apple is the largest publicly traded company by market cap, 16 other Dow stocks sport higher share prices than Apple, and therefore have more influence in moving the Dow Jones Industrial Average.

Since its inception, there have been more than 50 changes to the Dow's components. If a company struggles for too long or sees its share price become less relevant within the Index, it runs the risk of being kicked out. At the moment, three stocks look to be in danger of being kicked out of the Dow Jones Industrial Average. Here they are, along with the respective companies that might replace them.

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Dow stock No. 1 to boot: Walgreens Boots Alliance

The first Dow component that could be given the heave-ho sooner than later is pharmacy chain Walgreens Boots Alliance (WBA -1.26%). Although I'm a big fan of what Walgreens is doing on the turnaround front by cutting more than $2 billion in annual operating expenses, investing heavily in digitization, and opening up to 1,000 full-service health clinics with partner VillageMD by 2027, it's ultimately a small fish in a big pond. 

Walgreens has the smallest market cap within the Dow ($33 billion) and the third-lowest share price (about $38). Hypothetically, if Walgreens were to go to $0, it would result in the Dow losing just 256 points (i.e., not even a 1% move). With the company in the midst of a multiyear turnaround, it's hard to imagine it having a sizable impact on the Dow Jones anytime soon.

What company could replace Walgreens?

Although there's no set rule that removed companies have to be replaced with a business from the same sector or industry, CVS Health (CVS 0.21%) looks like a logical replacement. CVS is four times the size of Walgreens by market cap, and its nearly $102 share price would slot it in as the 20th-most influential stock within the Dow.

The only challenge for CVS Health is that it would create redundancies with existing Dow component UnitedHealth Group. UnitedHealth is one of the largest health insurers in the country. In 2018, CVS acquired health insurer Aetna to boost its organic growth rate and transform patient care in the United States. Putting CVS in the Dow Jones would mean a hearty helping of health insurance exposure for the index.

Dow stock No. 2 to boot: Dow Inc.

The second Dow component that could be kicked out of the index is chemical company Dow Inc. (DOW -2.22%). Although the specialty plastics and performance materials Dow develops are vital for a variety of industries and sectors, industrial stocks simply don't hold the same importance that they used to for today's economy.

To add, Dow Inc. has the second-smallest market cap within the iconic index ($35 billion), as well as the fifth-lowest share price (just shy of $50). Slow-growing, cyclical chemical companies like Dow don't have the ability to move the needle like they once did.

What company could replace Dow Inc.?

In order to ensure that the Dow Jones Industrial Average maintained some sort of industrials/basic materials exposure, adding electric-vehicle (EV) manufacturer Tesla (TSLA -3.48%) would make sense. Tesla is the largest auto stock in the world by market cap and is currently the leading producer of EVs throughout North America.

Tesla would previously not have been a consideration to enter the Dow due to its nosebleed share price that once eclipsed $1,000, as well as its prior history of operating losses. But following two stock splits since August 2020 and a turn to recurring profitability, Tesla and its $191 share price would be a logical addition. It would also be the first auto stock in the Dow since General Motors was dropped in 2009. 

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Dow stock No. 3 to boot: Verizon Communications

The third Dow Jones stock on very shaky ground is telecom company Verizon Communications (VZ 0.43%). Although Verizon remains a very large player in the domestic wireless and broadband space, its growth has slowed considerably. With interest rates rapidly rising, the cost to borrow to upgrade its wireless infrastructure and make future spectrum purchases became costlier as well.

When the closing bell tolled on Nov. 8, Verizon was the 16th-largest Dow component by market cap. However, its $38 share price placed it behind Walgreens Boots Alliance, making it the second-lowest within the index. Like Dow Inc. and Walgreens, Verizon simply doesn't have the needle-moving prowess it once had. That doesn't make it a bad company to own -- it just doesn't make for the best Dow Jones Industrial Average component.

What company could replace Verizon?

While the most logical like-for-like replacement would be telecom outperformer T-Mobile, my suspicion is Alphabet (GOOGL -0.83%) (GOOG -0.86%) would get the nod. Alphabet is the parent company of internet search engine Google, streaming platform YouTube, and autonomous vehicle company Waymo.

Even though there are already six technology stocks within the Dow, seemingly everything is becoming more tech dependent these days. Alphabet's utterly dominant search engine would provide a solid look at the health of the advertising market, while Google Cloud, which ranks third in the world in cloud infrastructure spending, would enhance the Dow's exposure to cloud computing. Following a 20-for-1 stock split in mid-July, Alphabet's $89 share price would be easily digestible by the Dow.