DOW INC (DOW)
US2605571031 - Common Stock
DOW gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 85 industry peers in the Chemicals industry. The financial health of DOW is average, but there are quite some concerns on its profitability. DOW is valued correctly, but it does not seem to be growing.
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.
Of the past 5 years DOW 4 years were profitable.
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 1.00%, DOW is doing worse than 61.18% of the companies in the same industry.
DOW has a Return On Equity of 3.11%. This is comparable to the rest of the industry: DOW outperforms 42.35% of its industry peers.
The Return On Invested Capital of DOW (3.33%) is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for DOW is in line with the industry average of 7.47%.
The 3 year average ROIC (8.04%) for DOW is well above the current ROIC(3.33%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1% | ||
| ROE | 3.11% | ||
| ROIC | 3.33% |
ROA(3y)6.16%
ROA(5y)3.64%
ROE(3y)19.89%
ROE(5y)11.88%
ROIC(3y)8.04%
ROIC(5y)6.66%
1.3 Margins
DOW's Profit Margin of 1.30% is on the low side compared to the rest of the industry. DOW is outperformed by 62.35% of its industry peers.
In the last couple of years the Profit Margin of DOW has declined.
DOW has a worse Operating Margin (4.71%) than 64.71% of its industry peers.
DOW's Operating Margin has declined in the last couple of years.
DOW's Gross Margin of 10.94% is on the low side compared to the rest of the industry. DOW is outperformed by 82.35% of its industry peers.
DOW's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.71% | ||
| PM (TTM) | 1.3% | ||
| GM | 10.94% |
OM growth 3Y-11%
OM growth 5Y-15.69%
PM growth 3Y-25.68%
PM growth 5Y-32.66%
GM growth 3Y-6.84%
GM growth 5Y-8.65%
2. Health
2.1 Basic Checks
DOW has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, DOW has less shares outstanding
Compared to 5 years ago, DOW has less shares outstanding
Compared to 1 year ago, DOW has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.18 indicates that DOW is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of DOW (2.18) is comparable to the rest of the industry.
The Debt to FCF ratio of DOW is 5.33, which is a neutral value as it means it would take DOW, 5.33 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of DOW (5.33) is better than 67.06% of its industry peers.
DOW has a Debt/Equity ratio of 0.80. This is a neutral value indicating DOW is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.80, DOW perfoms like the industry average, outperforming 41.18% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.8 | ||
| Debt/FCF | 5.33 | ||
| Altman-Z | 2.18 |
ROIC/WACC0.42
WACC7.86%
2.3 Liquidity
A Current Ratio of 1.77 indicates that DOW should not have too much problems paying its short term obligations.
With a Current ratio value of 1.77, DOW is not doing good in the industry: 63.53% of the companies in the same industry are doing better.
DOW has a Quick Ratio of 1.16. This is a normal value and indicates that DOW is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.16, DOW is doing worse than 60.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.77 | ||
| Quick Ratio | 1.16 |
3. Growth
3.1 Past
DOW shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -63.99%.
The earnings per share for DOW have been decreasing by -33.37% on average. This is quite bad
Looking at the last year, DOW shows a very negative growth in Revenue. The Revenue has decreased by -21.58% in the last year.
The Revenue has been decreasing by -2.09% on average over the past years.
EPS 1Y (TTM)-63.99%
EPS 3Y10.95%
EPS 5Y-33.37%
EPS growth Q2Q-6.52%
Revenue 1Y (TTM)-21.58%
Revenue growth 3Y5%
Revenue growth 5Y-2.09%
Revenue growth Q2Q-10.44%
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 31.74% on average per year.
The Revenue is expected to grow by 4.15% on average over the next years.
EPS Next Y36.67%
EPS Next 2Y39.59%
EPS Next 3Y32.02%
EPS Next 5Y31.74%
Revenue Next Year2.4%
Revenue Next 2Y3.82%
Revenue Next 3Y4.04%
Revenue Next 5Y4.15%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 24.81, DOW is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of DOW is on the same level as its industry peers.
When comparing the Price/Earnings ratio of DOW to the average of the S&P500 Index (25.25), we can say DOW is valued inline with the index average.
The Price/Forward Earnings ratio is 18.15, which indicates a rather expensive current valuation of DOW.
The rest of the industry has a similar Price/Forward Earnings ratio as DOW.
DOW's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.67.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.81 | ||
| Fwd PE | 18.15 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DOW is valued a bit cheaper than the industry average as 63.53% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of DOW indicates a somewhat cheap valuation: DOW is cheaper than 75.29% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.79 | ||
| EV/EBITDA | 11.06 |
4.3 Compensation for Growth
DOW's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
DOW's earnings are expected to grow with 32.02% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.68
PEG (5Y)N/A
EPS Next 2Y39.59%
EPS Next 3Y32.02%
5. Dividend
5.1 Amount
DOW has a Yearly Dividend Yield of 4.96%, which is a nice return.
Compared to an average industry Dividend Yield of 3.34, DOW pays a better dividend. On top of this DOW pays more dividend than 89.41% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.45, DOW pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.96% |
5.2 History
DOW has been paying a dividend for at least 10 years, so it has a reliable track record.
DOW has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years4
5.3 Sustainability
341.18% of the earnings are spent on dividend by DOW. This is not a sustainable payout ratio.
DP341.18%
EPS Next 2Y39.59%
EPS Next 3Y32.02%
DOW INC
NYSE:DOW (4/25/2024, 9:03:10 AM)
55.57
-1.41 (-2.47%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap39.08B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.96% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.81 | ||
| Fwd PE | 18.15 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.68
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1% | ||
| ROE | 3.11% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 4.71% | ||
| PM (TTM) | 1.3% | ||
| GM | 10.94% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.77
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.8 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.77 | ||
| Quick Ratio | 1.16 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-63.99%
EPS 3Y10.95%
EPS 5Y
EPS growth Q2Q
EPS Next Y36.67%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-21.58%
Revenue growth 3Y5%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y