The Dow Jones Industrial Average (DJIA) is the oldest stock index in America. Founded in 1896 by Charles Dow, Edward Jones, and Charles Bergstresser, it’s considered a benchmark for the performance of the country’s large, blue-chip companies—those big household names, like Home Depot (HD), Johnson & Johnson (JNJ), and McDonald’s (MCD).

Since the Dow has only 30 components, it’s considered a prestigious honor for a company to be added to the venerable index, because it has represented the most stable and reputable American corporations in history.

But a company’s place on the Dow isn’t permanent. As times change and industries evolve, the Dow must keep up, too. Hundreds of companies have been added—and removed—from the Dow since its inception at the turn of the 20th Century. Sure, no one is upset today that Bethlehem Steel is no longer part of the DJIA, but when it was dropped in 1997 after a seven-decade run (the company later declared bankruptcy), it was a headline-making event, signaling the decline of American heavy manufacturing and the rise of globalization.

In recent years, Dow components have shifted away from telecommunications and industrial sectors and towards tech and healthcare, to better reflect the changing economy.

Why price-weighting plays a role

Obviously, the Dow differs from other stock indexes, like the S&P 500, because it has only 30 components while the S&P has 500. But that’s not the only difference.

The S&P 500 is weighted by market capitalization, meaning that companies with larger market caps have a greater impact on the index’s overall performance. (This is the most common way to weight stock indices.)

The Dow Jones Industrial Average, on the other hand, is price-weighted, which means that a company’s share price means everything: A stock trading at $3,000 has much more influence than one trading at $300, for instance.

This might not be the most objective weighting method, considering that a stock’s price isn’t always commensurate with its total market value (that’s what market cap measures).

Stock splits also wreak havoc on the index: When Apple (AAPL) split 4:1 in 2020, for example, its weighting in the Dow dropped from around 12% to just 3%.

However, the Dow is actually managed by a group of people: The S&P Dow Jones Indices Index Committee (more on them below), who try to make sure that the price movements of a single company don’t distort the index’s main objective, which is to be a reflection of the broader market. This committee meets monthly and makes changes to the index on an “as-needed” basis, which includes adding or removing components.

Who manages the Dow?

The S&P Dow Jones Indices Index Committee is a small group of representatives from S&P Global, the company behind the S&P 500, and The Wall Street Journal, which was also founded by Dow, Jones, and Bergstresser.

There isn’t one set of rules they follow, according to S&P Global; rather, the committee focuses on qualitative factors, such as a company’s reputation, trading history, relevance to the broader market, and “interest to investors.” Companies must also be incorporated and headquartered in the U.S.

What happens when a company is dropped from the Dow?

Just because a company is dropped from the Dow Jones Industrial Average, however, doesn’t mean it’s delisted from its primary stock exchange, like the NYSE or NASDAQ.  

And it isn’t necessarily a black mark against the company, either.

Investors can still purchase shares (unless the company declares bankruptcy), but index funds and ETFs that track the Dow must sell them, resulting in share price declines and reduced liquidity.

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In addition, investors (as well as the media) often treat news as a warning about the company’s future, and a selloff often follows.

But this selloff can be short-lived. A 2018 report by Barron’s discovered that by measuring performance one year after a stock was added or deleted from the Dow, those stocks that were deleted actually performed better than the ones that were added.

That’s because, it goes on to say, much of the bad news has already been priced into the exiting stock.

5 stocks that went up after they were dropped by the DJIA

Of course, that’s not the case for all of the Dow’s drop-offs, but here’s a look at 5 recent companies that reached new highs after exiting the Dow:

General Electric

GE had the distinction of being the stock with the longest Dow tenure—more than a century—in fact, it had even been part of the very first Industrial Average back in 1896 (it went on and off the index a few times in the early 1900s).

The epitome of American industrial might and, at one point, the most valuable publicly traded company in the country, in the 2000s, GE suffered from shrinking revenues, declining stock performance, and significant restructuring. By 2018, its share price had dropped 50% to just $40, making it the worst performer in the Dow.

On June 19, 2018, the Dow Committee replaced it with Walgreens Boots Alliance Inc. (WBA), highlighting the index’s shift from its once-heavy industrial focus over to consumer goods and healthcare.

GE stock continued its downward slump for several more years, and in 2021 it executed a reverse stock split (1-for-8) to stabilize its listing. It also paid down debts and spun off several of its businesses.

But by 2025, Barron’s reported that GE Aerospace hit a 25-year record intraday high of $294.74 by cashing in on booming demand from the defense and airline industries. This represented a stock gain of over 240%.

Bank of America, Alcoa, and Hewlett-Packard

On September 20, 2013, all three companies received the boot from the Dow, due to their “sagging stock prices and the index committee’s desire to diversify the mix of companies represented,” according to The New York Times. The three were replaced by Visa (V), Nike (NKE), and Goldman Sachs (GS).

Aluminum company Alcoa, which joined the Dow in 1959, had suffered from a global slump in aluminum demand, while the Financial Crisis was responsible for Bank of America’s (BAC) and Hewlett-Packard’s (HPQ) departure.

In 2008, Bank of America acquired toxic subprime lender Countrywide Financial Corp., which took a sledgehammer to the stock’s value. Historical stock performance was also responsible for Hewlett-Packard’s exit, although many still believed its fundamentals remained strong—in fact, Yahoo Finance later called its removal “The Dow’s Biggest Mistake of 2013,” as it rose roughly 36% over the one-year period.

Alcoa shares also rose—by 60%—in the year following its removal. In 2016, the company was spun off into two separate entities: Alcoa, which focused on aluminum mining and processing, and Arconic, a materials supplier.

Shares peaked at $92 in 2022 due to surging demand and tight supplies of aluminum during the COVID-19 pandemic, but they plummeted 60% in the following three years due to geopolitical volatility. Between 2025 and 2026, however, share prices soared 80%, and several analysts believe it to be undervalued still.

Most impressive of the three, however, has been Bank of America. Between 2013 and 2026, BoA shares have risen more than 275%, from its closing price of $10.92 on September 20, 2013, to $53.20 on February 5, 2026, thanks to significant improvements to its operations, credit quality, and an organization-wide cost-cutting initiative known as “Project New BAC.”

Philip Morris (Altria)

Changing times reflect changing tastes, and one company that seems to perpetually reinvent itself is Altria. Formerly Philip Morris, which joined the Dow on October 30, 1985, the company changed its name to Altria on January 27, 2003, in an effort to rebrand and distance itself after agreeing to a $200 billion Master Settlement Agreement with U.S. States.

In addition to paying its massive penalties and facing increased regulation on its products, Altria spun off several businesses, including Kraft Foods. By doing so, it greatly reduced its size and impact on the economy, and so it was dropped from the Dow on February 19, 2008.

In an effort to rebound, it began raising its dividend. It also shifted towards smokeless tobacco products like e-cigarettes and nicotine pouches, and, Phoenix-like, it began to once again rise from the ashes of its former self.

After the smoke cleared from the Great Recession, by early 2010, the stock had recovered to its 2008 low of $12 per share.

In early February 2026, shares of MO closed at $65.39, representing an increase of 425+%.

Oh, and which stock replaced Altria in the Dow? Bank of America.