A little over a month ago, the folks at Consumerist.com began asking the American public for nominations for its 2012 annual Worst Company in America competition, or WCIA, for short.
The catch? As their name might suggest, Consumerist was only looking for companies that "regularly provide goods and services to American consumers."
After the nominees were collected, a series of NCAA-esque match-ups ensued between 32 of the most-complained-about businesses in our country. In the end, however, three publicly traded companies stood out among the rest.
But, while consumers certainly have some beef with the names below, does that make their stocks untouchable? Let's dig in to find out:
Third place: Comcast (NASDAQ:CMCS.A)
While Comcast won it all in the WCIA competition for 2010, I still can't imagine the cable giant was particularly pleased when it eked out a win for third over fee-charging ticket-seller extraordinaire and Live Nation subsidiary Ticketmaster this year.
Facing up-and-coming streaming competition from the likes of Netflix and Amazon.com, Comcast ticked off customers through the cable industry's increasingly nickel-and-dime approach, and with a few too many cases of horrendous customer service.
Even so, on the heels of announcing it would acquire General Electric's stake in NBCUniversal recently, Comcast also raised its dividend by 20% in February, to $0.195 per share. and announced it would repurchase $2 billion of its stock over the course of this year. In addition, its stock has returned nearly 40% over the past year, including dividends, handily beating the S&P 500's return by more than 20% during that time.
However, given the fierce competition for its core business going forward, I'm not particularly convinced Comcast will be able to keep this up over the long term. While I wouldn't call the stock untouchable, I'd rather put my money with Amazon or Netflix -- both companies whose competing services I use often and thoroughly enjoy.
Second place: Bank of America (NYSE:BAC)
Next, Bank of America took second place, thanks to its fair share of angry consumers' votes. I suppose this shouldn't have come as a big surprise considering that 2012 marked its second consecutive year coming in dead last in the American Customer Satisfaction Index survey.
Curiously enough, while Bank of America's shares dropped by more than 6% during intraday trading on Wednesday after the company posted mixed quarterly results, the stock remains within sight of its 52-week-highs, as the company continues to streamline operations. When the rubber hits the road, then, I've got to admit that Bank of America's stock is starting to look tantalizingly cheap.
First place: Electronic Arts (NASDAQ:EA)
Finally, much-maligned video game maker Electronic Arts won the unwanted distinction of the Consumerist's Worst Company in America for the second year in a row.
Perhaps it could have something to do with the fact that EA's uncharacteristically web-savvy customer base was more likely to take to the Internet to voice their discontent, but the fact remains that EA has plenty of improving to do in order to please the consumers it serves. Among their most common complaints were lackluster product support, less-than-polished games rushed to production, and uninspiring sequels to boot.
Sure enough, Electronic Arts' financial results have suffered along with the quality of its games, and Electronic Arts stock has fallen by nearly 70% over the past five years as a result. In the end, this directly led to the resignation last month of the company's CEO of six years, John Riccitiello.
Let it suffice to say that I'm not exactly a big fan of Electronic Arts stock; but, to be fair, it's hard to look good against an incredible competitor like the long-term minded, cash-generating machine that is Activision Blizzard. In fact, that's exactly why I outlined two big reasons to buy shares of Activision just last month.
Foolish final thoughts
In the end, while the Consumerist's WCIA competition wasn't exactly scientific, I have to applaud its end goal of holding consumer-facing companies accountable for their bad behavior. Most intriguing, though, is that the performance of the "worst" three companies of the bunch wasn't necessarily dictated by the wrath of a displeased customer base.
That doesn't mean, however, that all three of these companies shouldn't take the negative attention seriously. In the end, it certainly doesn't pay over the long run for them to repeatedly bite the millions of hands that fill their coffers each quarter -- just ask longtime shareholders of Electronic Arts.