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It’s out with the old and in with the new for the Dow Jones Industrial Average. Amazon will replace Walgreens on the index as of February 26, S&P Dow Jones Indices announced this week.
The Dow Jones Industrial Average is a stock market index comprising 30 of the largest companies on the New York Stock Exchange and Nasdaq. Walgreens has been listed on the index since June 2018 but the company’s stock fell around 30% in the past year, according to Bloomberg. Amazon’s stock rose roughly 80% over the same time period.
“Reflecting the evolving nature of the American economy, this change will increase consumer retail exposure as well as other business areas in the [Dow Jones Industrial Average],” executives from S&P Dow Jones Indices wrote in a press release.
The move to replace Walgreens with Amazon comes after Walmart, another member of the index, announced plans to split its stock 3-to-1, reducing the company’s weight on the index, The Associated Press reported. Since the Dow Jones is weighted by stock price rather than market cap, companies with higher stock prices have more weight on the index, according to the AP.
In January, Walgreens cut its dividend almost in half from $0.48 per share to $0.25 per share, marking the company’s first dividend cut in nearly 50 years, CNBC reported.
Walgreens declined to comment on whether the company expects its removal from the Dow Jones to have an effect on business.