Dec 5 2013

 

 

 

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You might be surprised that the number one company is even more unpopular than a tobacco company. Delta Airlines has gapped the distinction of being the least respected company in America. There is no question there are many contenders for the title but really is Delta worse than Dennys?

24/7 Wall Street picked the ten least respected. Here are the top five and you can see the rest here.

1. Delta

- Favorability score: 47
- Familiarity score: 92
- Industry: Airline

That an airlines is less respected than a tobacco company is almost unbelievable. But Delta Air Lines Inc. (NYSE: DAL), like most other air carriers, is unpopular with many Americans. Airlines receive extremely poor customer satisfaction grades due to increased delays and new charges for baggage and meals. Delta’s 2008 acquisition of Northwest Airlines has made things particularly bad for passengers. The creation of the new company has caused a nearly endless stream of ticketing and scheduling problems that have taken years to iron out. While airfares have declined by nearly 15% in inflation-adjusted dollars since 1995, they have risen from $300 to roughly $375 since the bottom of the recession.

2. Philip Morris

- Favorability score: 49
- Familiarity score: 80
- Industry: Tobacco

The tobacco industry has suffered from an image problem for decades. The negative perception reached its peak in the 1990s, when courts agreed that the companies had hid the harmful of effects of tobacco from smokers. Philip Morris tried to sanitize its image with acquisitions of unrelated businesses such as Kraft and Miller Brewing. The companies were later spun-off or sold. The tobacco company, then called Altria (NYSE: MO), split its U.S. and international divisions. The Philip Morris brand was used for the new international company, and the U.S. operations stayed with Altria. Most Americans are not familiar with Altria. However, Philip Morris International Inc. (NYSE: PM) continues to have a poor reputation because it is still associated with the tobacco industry. Tobacco companies may gain respect from investors by paying handsome dividends. Among the public at large, however, they are viewed far less favorably. This has likely Hurt Philip Morris’s overall respectability, according to Gregory.

3. H&R Block

- Favorability score: 51
- Familiarity score: 90
- Industry: Tax preparation

H&R Block Inc.’s (NYSE: HRB) biggest problem is likely the result of the business it’s in: tax return preparation. Worse, the company does not do much to help its reputation. H&R Block has been involved in several small scandals related to privacy and deceptive practices. Also, earlier this year, it was one of several firms that missed a change in IRS filing rules that resulted in delays in tax refunds to 600,000 customers. While H&R Block is never likely to win a popularity contest, it could do a much better job of creating a more positive image for itself.

4. Denny’s

- Favorability score: 54
- Familiarity score: 81
- Industry: Restaurant

Denny’s Corp. (NASDAQ: DENN) is a well-known name in the family restaurant business, but the company has a long history of alienating its customers. In the early 1990s the company settled charges of racial bias at some of its California stores. Since then, the chain has never really been able completely to overcome the fallout. Fortune named the company one of the best employers for minorities in 2004, but even that did not wipe away the earlier blots against the restaurant chain. One of Denny’s largest franchisees pressed CEO John Miller to add 5% to menu items to cover Obamacare expenses. The same franchisee suggested the customers could cover the higher price by cutting tips. Some customers boycotted the food chain and this hurt sales.

5. Big Lots

- Favorability score: 54
- Familiarity score: 82
- Industry: Retail

In general, discount stores’ favorability ratings follow the overall economy. Hard times hit low-income customers hardest, and that is where Big Lots Inc.’s (NYSE: BIG) customers come from. In fact, Big Lots’ favorability score, which was lowest during the bottom of the recession, has recovered somewhat, according to CoreBrand. The protracted economic hardship may have directly affected Big Lots’ appeal, especially if the company’s prices were not low enough for cash-strapped consumers. However, an insider trading scandal reported late last year did not appear to damage Big Lots’ stock price very much — or for very long. In fact, despite the charges, shares of Big Lots have risen 14% this year.

SEE THE REMAINDER OF THE TEN HERE>>>>>