DOW Stock Overview
Dow Inc. provides various materials science solutions for packaging, infrastructure, mobility, and consumer applications in the United States, Canada, Europe, the Middle East, Africa, India, the Asia Pacific, and Latin America.
Price History & Performance
|Historical stock prices|
|Current Share Price||US$56.02|
|52 Week High||US$71.86|
|52 Week Low||US$48.27|
|1 Month Change||6.81%|
|3 Month Change||-17.75%|
|1 Year Change||-7.48%|
|3 Year Change||33.22%|
|5 Year Change||n/a|
|Change since IPO||-0.41%|
Recent News & Updates
Are Investors Undervaluing Dow Inc. (NYSE:DOW) By 49%?
Today we will run through one way of estimating the intrinsic value of Dow Inc. ( NYSE:DOW ) by taking the expected...
Dow: Bag This Chemical Giant's 5.4% Yield
Dow is a diversified chemical company with a global footprint and solid profitability. Management is being disciplined with its cash flow by paying down debt and returning cash to shareholders via share buybacks and dividends. Its beaten down share price makes it a cyclical stock worth buying at present. Cyclical companies are often favorites among value investors because they can offer solid capital appreciation potential, so long as one buys closer to the bottom of the cycle than the top. It's even better if these companies pay a stable dividend to investors while they wait for an eventual turnaround. This brings me to Dow Inc. (DOW), which appears to be much closer to a bottom than its top of $70 share price achieved as recently as May. In this article, I highlight what makes Dow a good buy on share price weakness for potentially strong gains, so let's get started. Why Dow? Dow Inc. is among the three largest chemicals producers in the world, making plastics, chemicals and agricultural products across a broad set of use cases in consumer care, industrial, infrastructure, and farming. The company was formed in 2019 when its former parent, DowDuPont split into three publicly traded companies. It operates in 160 countries, has 54K employees, and generated $60 billion in total revenue over the trailing 12 months. Dow recently released respectable results, with revenue growing by 13% YoY (up 3% sequentially) to $15.7 billion in the second quarter. This was driven by gains in all regions except for Asia Pacific, which was impacted by pandemic-related lockdowns in China. Notably, global volume declined by a slight 2%, but Dow was able to offset this with a 16% price increase, signaling pricing power. As shown below, Dow scores an A profitability rating with a sector-leading FCF margin of 7.5% and a 38% return on equity. Dow Profitability (Seeking Alpha) Also encouraging, management is being disciplined with its cash flow, as it redeemed $750 million of outstanding notes, which will lower its annual interest expense by $27 million. It also has no substantial long-term debt maturities until 2027. It's also aggressively returning cash to shareholders. This is reflected by the $1.3 billion in capital returns during the second quarter alone, comprised of an impressive $800 million share buybacks and $505 million in dividends. While the quarterly dividend rate of $0.70 has remained flat, I give the company a pass, as it only recently initiated it in 2019, just before the global pandemic. Besides, the dividend is well covered by a low 29% payout ratio, giving ample room for raises down the line, especially after the reduced share count after repurchases. Headwinds to Dow include its sensitivity to raw material costs, which could pressure margins. Moreover, the CEO recently warned of a slowdown in Europe should natural gas be curtained because of reduced Russian supplies. Gas rationing, in general, could hurt metal production and processing as well as the chemical and paper industries. Nonetheless, Dow's low-cost position makes it well positioned to face near-term headwinds. In addition, it's seeing encouraging signs of normalization in industrial output from China, as noted in the recent conference call: In Europe, the geopolitical and inflationary environment is driving moderation in consumer confidence and spending. However, PMI was still at expansionary levels at the end of the quarter. In China, economic activity began to recover at the end of the quarter, with manufacturing PMI expanding in June and Chinese output and new orders lifting to expansionary levels for the first time since February. And as the regional economy continues to reopen, we expect industrial output and consumer spending to benefit from easing supply chain constraints as well. While the macroeconomic environment remains dynamic, we continue to see areas of underlying strength across our market verticals where demand and consumer spending have been resilient. Our unique competitive advantages including our global footprint, our industry-leading feedstock and derivative flexibility, combined with our chemistry toolkit and our innovation engine enabled Dow to remain agile to changing geographic energy and market conditions. Importantly, oil-gas spreads continue to support our structurally advantaged feedstock positions along the U.S. Gulf Coast, Canada, Argentina, and the Middle East. These advantages enable us to mitigate the impacts of higher raw material and energy costs as we navigate the market dynamics around the world.
Is Dow (NYSE:DOW) A Risky Investment?
Warren Buffett famously said, 'Volatility is far from synonymous with risk.' So it might be obvious that you need to...
|DOW||US Chemicals||US Market|
Return vs Industry: DOW underperformed the US Chemicals industry which returned -1.9% over the past year.
Return vs Market: DOW exceeded the US Market which returned -9% over the past year.
|DOW Average Weekly Movement||4.3%|
|Chemicals Industry Average Movement||6.6%|
|Market Average Movement||7.6%|
|10% most volatile stocks in US Market||17.1%|
|10% least volatile stocks in US Market||3.1%|
Stable Share Price: DOW is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.
Volatility Over Time: DOW's weekly volatility (4%) has been stable over the past year.
About the Company
Dow Inc. provides various materials science solutions for packaging, infrastructure, mobility, and consumer applications in the United States, Canada, Europe, the Middle East, Africa, India, the Asia Pacific, and Latin America. It operates through Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure, and Performance Materials & Coatings segments. The Packaging & Specialty Plastics segment provides ethylene, and propylene and aromatics products; and polyethylene, polyolefin elastomers, ethylene vinyl acetate, and ethylene propylene diene monomer rubbers.
Dow Fundamentals Summary
|DOW fundamental statistics|
Is DOW overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|DOW income statement (TTM)|
|Cost of Revenue||US$48.73b|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
Oct 20, 2022
|Earnings per share (EPS)||9.21|
|Net Profit Margin||11.00%|
How did DOW perform over the long term?See historical performance and comparison
5.0%Current Dividend Yield
Does DOW pay a reliable dividends?See DOW dividend history and benchmarks
|Dow dividend dates|
|Ex Dividend Date||Aug 30 2022|
|Dividend Pay Date||Sep 09 2022|
|Days until Ex dividend||10 days|
|Days until Dividend pay date||20 days|
Does DOW pay a reliable dividends?See DOW dividend history and benchmarks
Is DOW undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 5/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for DOW?
Other financial metrics that can be useful for relative valuation.
|What is DOW's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does DOW's PE Ratio compare to its peers?
|DOW PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
LYB LyondellBasell Industries
Price-To-Earnings vs Peers: DOW is good value based on its Price-To-Earnings Ratio (6.1x) compared to the peer average (7.1x).
Price to Earnings Ratio vs Industry
How does DOW's PE Ratio compare vs other companies in the US Chemicals Industry?
Price-To-Earnings vs Industry: DOW is good value based on its Price-To-Earnings Ratio (6.1x) compared to the US Chemicals industry average (17x)
Price to Earnings Ratio vs Fair Ratio
What is DOW's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PE Ratio||6.1x|
|Fair PE Ratio||13.3x|
Price-To-Earnings vs Fair Ratio: DOW is good value based on its Price-To-Earnings Ratio (6.1x) compared to the estimated Fair Price-To-Earnings Ratio (13.3x).
Share Price vs Fair Value
What is the Fair Price of DOW when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: DOW ($56.02) is trading below our estimate of fair value ($104.79)
Significantly Below Fair Value: DOW is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is less than 20% higher than the current share price.
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How is Dow forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?
Future Growth Score1/6
Future Growth Score 1/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: DOW's earnings are forecast to decline over the next 3 years (-10.7% per year).
Earnings vs Market: DOW's earnings are forecast to decline over the next 3 years (-10.7% per year).
High Growth Earnings: DOW's earnings are forecast to decline over the next 3 years.
Revenue vs Market: DOW's revenue is expected to decline over the next 3 years (-2.6% per year).
High Growth Revenue: DOW's revenue is forecast to decline over the next 3 years (-2.6% per year).
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: DOW's Return on Equity is forecast to be high in 3 years time (23.3%)
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How has Dow performed over the past 5 years?
Past Performance Score6/6
Past Performance Score 6/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: DOW has high quality earnings.
Growing Profit Margin: DOW's current net profit margins (11%) are higher than last year (8.8%).
Past Earnings Growth Analysis
Earnings Trend: DOW has become profitable over the past 5 years, growing earnings by 54.3% per year.
Accelerating Growth: DOW's earnings growth over the past year (62%) exceeds its 5-year average (54.3% per year).
Earnings vs Industry: DOW earnings growth over the past year (62%) exceeded the Chemicals industry 20.9%.
Return on Equity
High ROE: DOW's Return on Equity (34.3%) is considered high.
Discover strong past performing companies
How is Dow's financial position?
Financial Health Score3/6
Financial Health Score 3/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: DOW's short term assets ($21.8B) exceed its short term liabilities ($13.3B).
Long Term Liabilities: DOW's short term assets ($21.8B) do not cover its long term liabilities ($29.3B).
Debt to Equity History and Analysis
Debt Level: DOW's net debt to equity ratio (52.2%) is considered high.
Reducing Debt: Insufficient data to determine if DOW's debt to equity ratio has reduced over the past 5 years.
Debt Coverage: DOW's debt is well covered by operating cash flow (67.9%).
Interest Coverage: DOW's interest payments on its debt are well covered by EBIT (15x coverage).
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What is Dow current dividend yield, its reliability and sustainability?
Dividend Score 4/6
Cash Flow Coverage
Current Dividend Yield
Upcoming Dividend Payment
Dividend Yield vs Market
Notable Dividend: DOW's dividend (5%) is higher than the bottom 25% of dividend payers in the US market (1.48%).
High Dividend: DOW's dividend (5%) is in the top 25% of dividend payers in the US market (3.99%)
Stability and Growth of Payments
Stable Dividend: Whilst dividend payments have been stable, DOW has been paying a dividend for less than 10 years.
Growing Dividend: DOW has only been paying a dividend for 3 years, and since then payments have not increased.
Earnings Payout to Shareholders
Earnings Coverage: With its reasonably low payout ratio (31.1%), DOW's dividend payments are well covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: With its reasonably low cash payout ratio (32.2%), DOW's dividend payments are well covered by cash flows.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Jim Fitterling (60 yo)
Mr. James R. Fitterling, also known as Jim, serves as an Independent Director at 3M Company since February 5, 2021. He has been Chief Executive Officer of The Dow Chemical Company since July 1, 2018 and ha...
CEO Compensation Analysis
Compensation vs Market: Jim's total compensation ($USD24.86M) is above average for companies of similar size in the US market ($USD12.88M).
Compensation vs Earnings: Jim's compensation has been consistent with company performance over the past year.
Experienced Management: DOW's management team is considered experienced (3.7 years average tenure).
Experienced Board: DOW's board of directors are considered experienced (3.5 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: DOW insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Dow Inc.'s employee growth, exchange listings and data sources
- Name: Dow Inc.
- Ticker: DOW
- Exchange: NYSE
- Founded: 2018
- Industry: Commodity Chemicals
- Sector: Materials
- Implied Market Cap: US$40.232b
- Shares outstanding: 718.17m
- Website: https://www.dow.com
Number of Employees
- Dow Inc.
- 2211 H.H. Dow Way
- United States
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/08/18 00:00|
|End of Day Share Price||2022/08/18 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.