DOW INC (DOW) Stock Fundamental Analysis
NYSE:DOW - New York Stock Exchange, Inc. - US2605571031 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to DOW. DOW was compared to 85 industry peers in the Chemicals industry. Both the profitability and financial health of DOW have multiple concerns. While showing a medium growth rate, DOW is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
DOW had positive earnings in the past year.
DOW had a positive operating cash flow in the past year.
DOW had positive earnings in each of the past 5 years.
In the past 5 years DOW always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 0.49%, DOW is in line with its industry, outperforming 45.88% of the companies in the same industry.
The Return On Equity of DOW (1.67%) is comparable to the rest of the industry.
DOW's Return On Invested Capital of 2.21% is on the low side compared to the rest of the industry. DOW is outperformed by 69.41% of its industry peers.
DOW had an Average Return On Invested Capital over the past 3 years of 4.98%. This is in line with the industry average of 6.84%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.49% | ||
| ROE | 1.67% | ||
| ROIC | 2.21% |
ROA(3y)3.48%
ROA(5y)4.48%
ROE(3y)10.49%
ROE(5y)15.16%
ROIC(3y)4.98%
ROIC(5y)6.12%
1.3 Margins
DOW has a Profit Margin (0.66%) which is in line with its industry peers.
In the last couple of years the Profit Margin of DOW has declined.
DOW has a Operating Margin of 3.25%. This is in the lower half of the industry: DOW underperforms 70.59% of its industry peers.
DOW's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 9.38%, DOW is doing worse than 83.53% of the companies in the same industry.
DOW's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.25% | ||
| PM (TTM) | 0.66% | ||
| GM | 9.38% |
OM growth 3Y-32.39%
OM growth 5Y-11.56%
PM growth 3Y-39.18%
PM growth 5YN/A
GM growth 3Y-18.23%
GM growth 5Y-6.06%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), DOW is destroying value.
DOW has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, DOW has less shares outstanding
The debt/assets ratio for DOW is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.71, we must say that DOW is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of DOW (1.71) is comparable to the rest of the industry.
A Debt/Equity ratio of 0.96 indicates that DOW is somewhat dependend on debt financing.
DOW has a Debt to Equity ratio of 0.96. This is in the lower half of the industry: DOW underperforms 65.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.96 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.71 |
ROIC/WACC0.26
WACC8.37%
2.3 Liquidity
A Current Ratio of 1.54 indicates that DOW should not have too much problems paying its short term obligations.
The Current ratio of DOW (1.54) is worse than 64.71% of its industry peers.
DOW has a Quick Ratio of 1.54. This is a bad value and indicates that DOW is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.90, DOW is doing worse than 71.76% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.54 | ||
| Quick Ratio | 0.9 |
3. Growth
3.1 Past
DOW shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -47.30%.
The earnings per share for DOW have been decreasing by -12.16% on average. This is quite bad
The Revenue has decreased by -2.08% in the past year.
Measured over the past years, DOW shows a small growth in Revenue. The Revenue has been growing by 0.01% on average per year.
EPS 1Y (TTM)-47.3%
EPS 3Y-42.47%
EPS 5Y-12.16%
EPS Q2Q%-96.43%
Revenue 1Y (TTM)-2.08%
Revenue growth 3Y-7.88%
Revenue growth 5Y0.01%
Sales Q2Q%-3.1%
3.2 Future
Based on estimates for the next years, DOW will show a very strong growth in Earnings Per Share. The EPS will grow by 22.45% on average per year.
The Revenue is expected to grow by 1.26% on average over the next years.
EPS Next Y-79.89%
EPS Next 2Y-13.66%
EPS Next 3Y5.32%
EPS Next 5Y22.45%
Revenue Next Year-2.87%
Revenue Next 2Y0.05%
Revenue Next 3Y1.12%
Revenue Next 5Y1.26%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 22.63, which indicates a rather expensive current valuation of DOW.
DOW's Price/Earnings is on the same level as the industry average.
DOW's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.15.
Based on the Price/Forward Earnings ratio of 20.77, the valuation of DOW can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DOW is on the same level as its industry peers.
DOW's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.60.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.63 | ||
| Fwd PE | 20.77 |
4.2 Price Multiples
71.76% of the companies in the same industry are more expensive than DOW, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 7.89 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-13.66%
EPS Next 3Y5.32%
5. Dividend
5.1 Amount
DOW has a Yearly Dividend Yield of 10.31%, which is a nice return.
Compared to an average industry Dividend Yield of 3.69, DOW pays a better dividend. On top of this DOW pays more dividend than 95.29% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, DOW pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 10.31% |
5.2 History
DOW has been paying a dividend for at least 10 years, so it has a reliable track record.
As DOW did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years5
5.3 Sustainability
700.00% of the earnings are spent on dividend by DOW. This is not a sustainable payout ratio.
DP700%
EPS Next 2Y-13.66%
EPS Next 3Y5.32%
26.48
-0.52 (-1.93%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners67.9%
Inst Owner Change0.34%
Ins Owners0.14%
Ins Owner Change13.33%
Market Cap18.72B
Analysts65
Price Target38.29 (44.6%)
Short Float %4.75%
Short Ratio3.3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 10.31% |
Yearly Dividend2.8
Dividend Growth(5Y)N/A
DP700%
Div Incr Years0
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)100.93%
Min EPS beat(2)-100%
Max EPS beat(2)301.86%
EPS beat(4)2
Avg EPS beat(4)49.47%
Min EPS beat(4)-100%
Max EPS beat(4)301.86%
EPS beat(8)6
Avg EPS beat(8)29.87%
EPS beat(12)9
Avg EPS beat(12)23.71%
EPS beat(16)13
Avg EPS beat(16)19.87%
Revenue beat(2)1
Avg Revenue beat(2)-0.57%
Min Revenue beat(2)-1.99%
Max Revenue beat(2)0.85%
Revenue beat(4)2
Avg Revenue beat(4)-0.44%
Min Revenue beat(4)-1.99%
Max Revenue beat(4)1.19%
Revenue beat(8)5
Avg Revenue beat(8)0.21%
Revenue beat(12)7
Avg Revenue beat(12)0.78%
Revenue beat(16)10
Avg Revenue beat(16)1.29%
PT rev (1m)0.23%
PT rev (3m)-18.3%
EPS NQ rev (1m)-296.69%
EPS NQ rev (3m)-101.05%
EPS NY rev (1m)-7.16%
EPS NY rev (3m)-82.32%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)-4.66%
Revenue NY rev (1m)0.14%
Revenue NY rev (3m)-2.86%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.63 | ||
| Fwd PE | 20.77 | ||
| P/S | 0.44 | ||
| P/FCF | N/A | ||
| P/OCF | 7.37 | ||
| P/B | 1.11 | ||
| P/tB | 2.87 | ||
| EV/EBITDA | 7.89 |
EPS(TTM)1.17
EY4.42%
EPS(NY)1.27
Fwd EY4.81%
FCF(TTM)-0.52
FCFYN/A
OCF(TTM)3.59
OCFY13.58%
SpS60.31
BVpS23.75
TBVpS9.22
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.49% | ||
| ROE | 1.67% | ||
| ROCE | 2.95% | ||
| ROIC | 2.21% | ||
| ROICexc | 2.28% | ||
| ROICexgc | 2.94% | ||
| OM | 3.25% | ||
| PM (TTM) | 0.66% | ||
| GM | 9.38% | ||
| FCFM | N/A |
ROA(3y)3.48%
ROA(5y)4.48%
ROE(3y)10.49%
ROE(5y)15.16%
ROIC(3y)4.98%
ROIC(5y)6.12%
ROICexc(3y)5.34%
ROICexc(5y)6.58%
ROICexgc(3y)7.02%
ROICexgc(5y)8.73%
ROCE(3y)6.67%
ROCE(5y)8.19%
ROICexcg growth 3Y-37.36%
ROICexcg growth 5Y-11.15%
ROICexc growth 3Y-36.83%
ROICexc growth 5Y-10.38%
OM growth 3Y-32.39%
OM growth 5Y-11.56%
PM growth 3Y-39.18%
PM growth 5YN/A
GM growth 3Y-18.23%
GM growth 5Y-6.06%
F-Score5
Asset Turnover0.74
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.96 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 3.76 | ||
| Cap/Depr | 100.8% | ||
| Cap/Sales | 6.83% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 59.48% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.54 | ||
| Quick Ratio | 0.9 | ||
| Altman-Z | 1.71 |
F-Score5
WACC8.37%
ROIC/WACC0.26
Cap/Depr(3y)86.15%
Cap/Depr(5y)75.88%
Cap/Sales(3y)5.12%
Cap/Sales(5y)4.52%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-47.3%
EPS 3Y-42.47%
EPS 5Y-12.16%
EPS Q2Q%-96.43%
EPS Next Y-79.89%
EPS Next 2Y-13.66%
EPS Next 3Y5.32%
EPS Next 5Y22.45%
Revenue 1Y (TTM)-2.08%
Revenue growth 3Y-7.88%
Revenue growth 5Y0.01%
Sales Q2Q%-3.1%
Revenue Next Year-2.87%
Revenue Next 2Y0.05%
Revenue Next 3Y1.12%
Revenue Next 5Y1.26%
EBIT growth 1Y-35.66%
EBIT growth 3Y-37.72%
EBIT growth 5Y-11.56%
EBIT Next Year61.84%
EBIT Next 3Y31.76%
EBIT Next 5Y24.7%
FCF growth 1Y-108.31%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-60.34%
OCF growth 3Y-25.36%
OCF growth 5Y-13.25%