The Dow Jones Industrial Average is currently riding high on the stock market as the bull run from spring 2023 continues. But within this index of 30 leading blue-chip stocks, not all companies are enjoying the same success. In fact, most of the Dow’s components are facing significant challenges, causing the index to trail behind the benchmark S&P 500 and the tech-heavy Nasdaq. This underperformance is mainly due to the Dow’s limited exposure to the high-flying tech sector and the burgeoning field of artificial intelligence (AI). With the old economy sectors such as oil, finance, and construction dominating the Dow’s lineup, it’s no surprise that equities growth in the index is stymied. It’s time to act – three Dow stocks should be offloaded now.

Ailing UnitedHealth Group (UNH)

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The largest healthcare insurer, UnitedHealth Group (NYSE:UNH), is grappling with a worrisome issue – a surge in medical expenses that’s denting its bottom line. This uptick in healthcare services utilization among seniors enrolled in U.S. Medicare Advantage plans has especially impacted UnitedHealth, causing its stock to plunge by 4% this year. Although the company managed to surpass Wall Street estimates with its Q4 2023 financials, reporting earnings per share (EPS) of $6.16 and revenue of $94.4 billion, it is currently uncertain when the company will find respite from the heightened medical services utilization, particularly among aging seniors. This ongoing problem has led to waning investor confidence and skepticism from financial analysts.

Walgreens Boots Alliance (WBA)

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Pharmacy giant Walgreens Boots Alliance (NASDAQ:WBA) has left investors reeling as the company recently chopped its quarterly dividend payments by nearly 50%. This substantial reduction, from 48 cents to 25 cents per share, was a massive blow. Walgreens cited the move as a strategic step to fortify its long-term financial position, but this rationale did little to assuage shareholders. With the current dividend yield standing at 4.48% (down from over 7%), this cut represents the company’s first in nearly 50 years. WBA stock plummeted by 16% year-to-date, resulting in a nearly 40% decrease over the last 12 months.

Nike (NKE)

Despite best efforts, the sneaker giant, Nike (NYSE:NKE), is struggling to regain its footing. The company’s latest series of disappointing earnings reports and a significant decline in share price have left investors wary. In 2024, Nike’s share price remains flat, but NKE stock has plummeted by 16% over the past 12 months and is nearly 40% below the all-time high it reached in November 2021. The ongoing challenges and poor share price performance have led to Nike being regarded as a Dow stock to sell in February.

Nike’s Financial Woes

Just before Christmas, NKE stock suffered a 12% drop following the company’s release of mixed financial results and a lowered sales outlook. Nike reported earnings per share (EPS) of $1.03, surpassing the 85 cents that had been expected on Wall Street. However, the revenue totaled $13.39 billion, falling short of the $13.43 billion that analysts had forecast. Looking ahead, Nike anticipates a minimal 1% growth in full-year revenue, in contrast to its initial projection of approximately 5% growth.

Nike’s Cost-Cutting Measures

In a bid to bounce back, the company has announced plans to reduce costs by $2 billion over the next three years, mainly through staff layoffs. However, the potential impact of these measures remains uncertain. Compounding the company’s woes, Nike recently declared the termination of its longstanding sponsorship of golfer Tiger Woods, further dampening overall market sentiment surrounding the stock.

Author Expertise and Disclosure

On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.