The West Michigan Index (WMI) rose 17.5% percent in 2024, outperforming the Dow Jones Industrial Index but underperforming the S&P 500 and the NASDAQ indices.

Table 1 below highlights 2024 returns for these four indices and also shows compound returns for the three-year period of 2022 through 2024.

Last year was a particularly good year for all four stock indices as shown in Table 1. Index returns ranged from the Dow’s 12.9% to the NASDAQ’s 28.4% return. These are great returns across the board, and over the past two years, a huge amount of wealth has been created. On the other hand, you can see in the table below that 2022 was a terrible year, so perhaps the high returns over the past two years were merely offsetting 2022’s Bear Market returns.

Investors in West Michigan publicly-traded stocks have been the greatest beneficiaries over the three-year period as shown above, gaining a total of 29.2 percent. Over the past three years, stock index returns have generated about what would be expected based on decades of stock market performance.

Table 2 below ranks the fifteen companies comprising the WMI by their 2024 returns. Individual company returns varied from Wolverine World Wide’s stunning 148.6 percent increase to Meritage Hospitality Group’s 28.2 percent price fall.

The WMI weights each stock’s return by its market capitalization. Accordingly, the higher a stock’s price and the more shares outstanding, the higher the weight, and the greater the impact that stock has on the WMI. For instance, Meritage Hospitality Group Inc. has about 6.6 million shares outstanding, while Stryker has 381 million, about fifty-eight times greater. Further, Stryker’s year-end stock price was nearly twenty-six times greater than Meritage’s. These two factors give Stryker a market weight of about 1,500 times that of Meritage. That explains why the WMI Index’s performance is dominated by the largest corporations: They have the largest market capitalizations.

The 2024 performance of each of the fifteen companies comprising the WMI is described below. Most of the discussion is based on information found in the most recent quarterly earnings reports. Companies are grouped by industry or otherwise listed alphabetically.

Three banks are included in the West Michigan Index: Choice One Financial Services, Inc, Independent Bank Corporation, and Mercantile Bank Corporation. If you follow West Michigan-headquartered banks, you will recognize that a local bank is no longer local. Macatawa Bank Corporation was acquired by Wintrust Financial Corporation, a Chicago area bank, on August 1, 2024. Because Macatawa no longer exists as a separate business entity, it is no longer a component of the WMI.

All three banks ended the year with double-digit stock price increases, and their price movements throughout the year followed the same pattern in 2024. Prices did not change appreciably until late July. Then they shot up generating nearly all of the 2024 stock increases. Although the banks had mixed financial performances in the most recent quarter, they beat consensus estimates, and that is the main reason their stock prices rose.

ChoiceOne Financial Services, Inc.

Sparta-based ChoiceOne Financial Services is the holding company for ChoiceOne Bank. Its stock price rose 21.6% last year. The bank grew its earnings per share in each of the past four quarters, and in doing so, also beat analysts’ consensus estimates. Through the first nine months of 2024, its earnings per share was up 26%, revenue was up 24%, and net income was up 44% compared with the prior year third quarter. Investors were pleased as reflected in the bank’s stock price gain.

ChoiceOne has $2.7 billion in assets and was founded in 1898.

Independent Bank Corporation

Grand Rapids-based Independent Bank Corporation, the holding company for Independent Bank, had a great year. Through July, its stock price averaged about $25 per share. Second quarter earnings were released, kicking off a rapid price increase to $35, and it stayed at that level for the rest of the year. Third quarter loan volume rose over nine percent, deposits rose eight percent, and loan quality was near an all-time high.

The bank has $5.3 billion in assets and has been in business since 1864. It ended 2024 with a 33.9% increase in its stock price.

Mercantile Bank Corporation

Grand Rapids-based Mercantile Bank Corporation is the holding company for Mercantile Bank and has $5.4 billion in assets. Its financial performance for 2024 was mixed. As with Independent Bank and Choice One, its stock price rose rapidly in July, moving from about $40 per share to more than $50. All three banks released quarterly reports at mid-year highlighting improving financial strength. Mercantile’s good news was that, compared with a year earlier, its revenue increased, but its net income and earnings per share decreased. Even so, these numbers where higher than stock research analysts’ consensus estimates. Stockholders and investors were happy with the results, and by year’s end, Mercantile’s stock generated a 10.2% gain for the year.

West Michigan is home to two large publicly-traded office furniture companies:  Steelcase Inc. and MillerKnoll, Inc. Both companies have been coping for a few years with two industry-wide challenges.  One is the huge amount of empty office space in big cities across the U.S. The culprit is the substantial number of workers who still work from home even though COVID is no longer an issue. Most experts do not believe we will ever go back to the days when everyone worked in an office.

The other issue is anxiety about the future demand for office space. Companies are hesitant to build new facilities or remodel old buildings whether its concerns about inflation, high interest rates, wars, no economic growth in Europe, angst about the political changes in Washington, D.C., or any of several other undesired conditions.

Here is how the stocks of the two West Michigan-based companies performed last year.

MillerKnoll, Inc.

The company’s second quarter financial report on December 18 reported a 5.3 percent decline in domestic revenue and a slight decline in orders. Yet earnings were up 2.2 percent. That was not enough to keep the stock price from falling 15.3% during the year.

Steelcase Inc.

Steelcase’s stock price wobbled between $12-$14 for almost all of 2024.  At the very end of December, however, its stock price dropped to $11.82, and Steelcase stockholders ended the year with a 12.6% stock loss. Why? The company’s financial performance deteriorated compared with 2023. Third quarter revenue fell 2.2% compared with a year earlier, profit margin fell 2.3%, and earnings per share fell by a whopping 38%.

It is disheartening when one takes a long view of Steelcase’s past performance. The company has had its moments over the past 25 years when its stock price reached $20 per share. But for the majority of time, its stock price has been less than $20. In fact, its end-of-year 2024 price of $11.82 matches its price in 2000.

Gentex Corporation

Gentex is a world leader in self-dimming vehicle mirrors. Its stock price fell 12% last year after beginning the year at $32.66, moving to nearly $40 by March, falling to $30 by August, and finally tailing off to $28.73 by December 31. Whenever Gentex is not doing well, it is a safe bet that the auto industry is experiencing issues. And that was the case last year. Vehicle production fell three percent, and that led to a 1.8 percent decline in Gentex sales.

When vehicle sales bounce back, Gentex will be ready to take advantage of the opportunity. It is the industry leader, it has pricing power, higher margins than its competitors, generates considerable free cash and is noted for its ability to develop a continuous stream of new products. Gentex stock is attractive to patient investors.

Kellanova

Kellanova was created in October 2023 when W.G. Kellogg spun off its snacks division as a separate company named Kellanova. What is left of W.G. Kellogg is the cereal division. Accordingly, 2024 is the first full year of financial performance for both companies.

Kellanova produces and sells a large variety of snacks and convenience foods including such popular brands as Pop-Tarts, Chez-It, and Pringles. These products have a much better financial outlook than breakfast cereal, and accordingly, Kellanova’s financial performance was expected to be better than Kellogg’s. Through July last year, Kellanova’s stock price was in the high $50s price range. Mars Company, the candy company, announced in August that it was going to acquire Kellanova for $83.50 per share. Upon the news, Kellanova’s stock price shot up to about $80 and stayed at that level through the end of 2024.   The acquisition is expected to happen in the first half of 2025, and when that happens, we can say that Kellanova existed for only about eighteen months.

Kellogg

At the time of the Kellanova spin off, many investors had their doubts about Kellogg’s viability. After all, sales of breakfast cereals have long been in decline.

So how did that first year go? Actually, much better you might expect. The stock price began the year at $13.14, rose to $25 in May, and then gradually fell to around $18 by the end of the year. Third quarter performance was described as strong, outperforming consensus estimates, and the company raised its earnings estimates for the full year.

Third quarter revenue was flat compared with 2023, but the company lost $11 million compared with earning $42 million over the same period in 2023. The company predicted that revenue would be flat over the next three years. That usually is not information that makes investors happy, but they were. The stock rose eight percent upon the announcement. And for the full year, Kellogg’s stock price rose 36.9%.

Meritage Hospitality Group Inc.

Meritage, based in downtown Grand Rapids, operates 381 Wendy’s, Taco John’s, Stan’s Taco, and Morning Belle quick-service and casual restaurants. Its stock price fell continuously throughout the year, ending up as the worst performing stock in the WMI. In fact, the company’s stock price is in a three-and-one-half-year downward spiral going from $22 to $14 over that period. It is interesting to note that revenue has slowly increased over that period, but earnings per share have fallen significantly. That implies that the problem is rising expenses. The company says it is struggling to keep up with higher prices of food, paper, and labor. Its performance would have been much better in 2024 had the company not incurred a $1.8 million expense associated with closing several of its restaurants.

Meritage executives expect higher sales and greater operating margins resulting from newly developed Wendy’s and Morning Belle restaurants, reimaged restaurants, and future acquisitions. That would please investors and drive up the stock price. On the other hand, Meritage executives usually have rosy forecasts, so 2025 will be an interesting year for the company’s stock price.

Perrigo Corporation, PLC

Perrigo was founded in 1887 in Allegan, Michigan. As decades passed, the company focused on generic medicines, eventually becoming the biggest over-the-counter products manufacturer in the U.S. with several facilities in Allegan. Then, in 2013, the company moved its headquarters to Dublin, Ireland as part of a tax inversion where the goal was to be headquartered in a country with a low corporate tax rate of 14 percent. Still, the majority of its operations remain in Allegan.

After beginning 2024 with a $32.18 stock price, Perrigo’s stock slowly decreased and ended at $25.17, a 20.1 percent annual decrease. Sadly, the company’s price peaked in mid-2015 at close to $190 and has fallen year after year, a nine- and one-half-year time period. The fundamental issues are falling earnings and low revenue growth. On the other hand, the company is predicting a 3.4 percent annual increase in revenue for the next three years. Needless to say, Perrigo’s stock is appealing to only those investors with high risk tolerances.

SpartanNash Company

Byron Center, Michigan headquartered SpartanNash operates nearly two hundred grocery stores and distributes grocery store products to nearly 2,300 independent retail stores throughout the U.S. The company also distributes grocery store products to military bases.

The company’s stock fell 20.2% in 2024 and has been trending downward during the past two years. In the most recent quarter, SpartanNash’s revenue was flat compared with the same quarter last year, but net income was down almost 2%. The company attributed this decrease in revenue to its wholesale customers which was only partially offset by increased revenue from its retail business. The stock price dropped on the announcement.

There is good news for SpartanNash’s investors. Its stock dividend of $0.87 is equivalent to a 4.8% dividend yield, an unusually high return as dividends go. Over many years, the company’s dividend has been stable and dependable. Because it is so difficult for a grocery store business to increase its revenue, the focus needs to be on reducing expenses. If Spartan can do that, investors will be pleased.

Stryker Corporation

Stryker is a favorite of many West Michigan investors. For instance, its price has risen tenfold since 2010, and the growth rate is accelerating. For instance, over the past two years, its price has increased a cumulative return of 46 percent. Stryker is a Portage, Michigan medical technology company that sells its products to doctors, hospitals, and medical facilities. It has an extensive product range, is a market leader in most of them, and owns nearly 13,000 global patents. In the last forty years, Stryker sales have never fallen year over year by more than six percent. That is extreme stability.

Third quarter revenue and earnings both beat consensus estimates, and the company projected that 2025 earnings per share would increase by 13.8 percent. It achieves most of its growth via acquisitions. In a typical year, Stryker completes several acquisitions of healthcare industry firms.

UFP Industries, Inc.

Grand Rapids-based UFP Industries, Inc. is a major competitor in manufacturing and sales of wood-related products. The company owns two hundred facilities worldwide, and is organized into three segments—retail, packaging, and construction products. It has been an outstanding investment for several years. In fact, since the beginning of 2011, its stock has increased more than ten-fold. However, its stock price declined 10.3 percent in 2024 when, in the last two weeks of December, the company’s stock price decreased from $143 to $112.65. The decline followed announcement of third quarter revenue declining nearly 10 percent and an announcement by Bloomberg that U.S. housing starts had fallen considerably, thereby reducing the demand for wood products. In response, UFP Industries announced plans to spend one billion dollars over the next five years on acquisitions, growth, automation, and efficiency, thereby reducing expenses by $70 million.

Whirlpool Corporation

Benton Harbor-based Whirlpool manufactures and markets home appliances and related products worldwide. It markets and distributes twenty brands with many of them familiar to most Americans. The list includes Whirlpool, Maytag, KitchenAid, and JennAir.

The company’s stock price dropped six percent in 2024. One issue is a decrease in demand for the company’s products, and the decrease is mostly due to higher mortgage rates which restrains house building and remodeling. On the other hand, Whirlpool has taken positive steps to improve.  Its profit margin increased in the third quarter, and the company expects further increases in the fourth quarter.

One attractive feature of Whirlpool’s stock is its dividend yield. The dividend yield is 6.2%, a relatively high yield. The company has a long history of dividend increases and no dividend cuts over the past thirty years. The high yield and dividend stability is attractive to many investors, and if the rate of sales growth increases, Whirlpool’s stock price will bounce back.

Wolverine Worldwide, Inc.

Rockford-based Wolverine Worldwide describes its business as, “designing, manufacturing, sourcing, marketing, licensing, and distributing footwear, apparel, and accessories.”  It is the source of more than a dozen well-known shoe brands such as Hush Puppies, Harley-Davidson, Sperry, Keds, and Wolverine.

Wolverine Worldwide ended the year with a stunning stock price increase of 148.6 percent, three times better than the next highest return in the WMI. After starting the year at $8.89 per share, the stock price began rising, and when third quarter earnings were reported, share price shot up.  Earnings beat analysts’ expectations by eight percent, a significant achievement. The company had strong demand for its activewear and athletic brands. The vast majority of stock analysts have increased their target price forecasts for 2025. They are nearly unanimous in predicting that 2025 will be a really good year for Wolverine.