Shareholders of Bank of East Asia Ltd (BKEAY, Financial) and Avanos Medical Inc (AVNS, Financial) may have reason to be dissatisfied with their holdings.
First of all, these companies have underperformed the U.S. market significantly over the past year, two years and five years. The S&P 500 index, which is a benchmark for the U.S. market, has gained about 7% in the past year, 44% over the past two years and 44% over the past five years.
Second, they either do not pay dividends or they have reduced the dividend significantly over the past couple of years.
Third, sell-side analysts on Wall Street have issued negative recommendation ratings for them.
Bank of East Asia
Shares of Bank of East Asia Ltd have lost 38.2% in the past year, 52.3% over the past two years and 44.7% over the past five years through Feb. 27. The Hong Kong-based regional bank has underperformed the U.S. market by 45.2%, 59.3% and 73.3%, respectively.
In 2019, the company paid a total dividend of 10 cents per common share, of which 5.5 cents were through semi-annual distributions and 4.5 cents were through a special dividend. The regional bank has significantly reduced the payment in the past year, down 61% from 14.1 cents per common share in 2018.
Wall Street sell-side analysts issued an underweight recommendation rating for this stock with an average target price of $2.10 per share.
The below chart shows that the share price started 2020 continuing its downtrend. It lost 4% so far this year, closing at $2.10 on Thursday for a market capitalization of $6.1 billion.
The 14-day relative strength index of 39 suggests the stock is not far from oversold levels.
Avanos Medical
Shares of Avanos Medical Inc have declined by 32% in the past year, 33% in the past two years and 29.5% in the past five years through Feb. 27, underperforming the U.S. market by 39%, 40% and 73.5%, respectively.
The Alpharetta, Georgia-based provider of medical device solutions does not pay a dividend.
Wall Street sell-side analysts issued a moderate sell recommendation rating for this stock with an average price target of $32 per share.
Shares of Avanos Medical Inc closed at $32.62 on Thursday for a market capitalization of $1.56 billion. The stock is down about 3% so far this year, and the 14-day Relative Strength Indicator of 58 indicates that it is not oversold.
Disclosure: I have no positions in any securities mentioned.
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