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DOW INC (DOW) Stock Fundamental Analysis

NYSE:DOW - New York Stock Exchange, Inc. - US2605571031 - Common Stock - Currency: USD

41.3901  +0.57 (+1.4%)

Fundamental Rating

3

Taking everything into account, DOW scores 3 out of 10 in our fundamental rating. DOW was compared to 85 industry peers in the Chemicals industry. Both the profitability and financial health of DOW have multiple concerns. DOW is valued correctly, but it does not seem to be growing.


Dividend Valuation Growth Profitability Health

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3

1. Profitability

1.1 Basic Checks

In the past year DOW was profitable.
In the past year DOW had a positive cash flow from operations.
DOW had positive earnings in 4 of the past 5 years.
In the past 5 years DOW always reported a positive cash flow from operatings.
DOW Yearly Net Income VS EBIT VS OCF VS FCFDOW Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 0 5B -5B

1.2 Ratios

DOW has a Return On Assets of 1.77%. This is comparable to the rest of the industry: DOW outperforms 46.99% of its industry peers.
DOW's Return On Equity of 5.75% is in line compared to the rest of the industry. DOW outperforms 51.81% of its industry peers.
DOW has a Return On Invested Capital of 2.93%. This is in the lower half of the industry: DOW underperforms 65.06% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DOW is in line with the industry average of 6.57%.
The last Return On Invested Capital (2.93%) for DOW is well below the 3 year average (8.04%), which needs to be investigated, but indicates that DOW had better years and this may not be a problem.
Industry RankSector Rank
ROA 1.77%
ROE 5.75%
ROIC 2.93%
ROA(3y)6.16%
ROA(5y)3.64%
ROE(3y)19.89%
ROE(5y)11.88%
ROIC(3y)8.04%
ROIC(5y)6.66%
DOW Yearly ROA, ROE, ROICDOW Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 0 10 -10 20 30

1.3 Margins

DOW's Profit Margin of 2.44% is in line compared to the rest of the industry. DOW outperforms 44.58% of its industry peers.
In the last couple of years the Profit Margin of DOW has declined.
DOW has a worse Operating Margin (4.33%) than 67.47% 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 10.76%, DOW is doing worse than 81.93% of the companies in the same industry.
In the last couple of years the Gross Margin of DOW has declined.
Industry RankSector Rank
OM 4.33%
PM (TTM) 2.44%
GM 10.76%
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%
DOW Yearly Profit, Operating, Gross MarginsDOW Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 0 5 10 15 20

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3

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so DOW is destroying value.
The number of shares outstanding for DOW has been reduced compared to 1 year ago.
The number of shares outstanding for DOW has been reduced compared to 5 years ago.
The debt/assets ratio for DOW is higher compared to a year ago.
DOW Yearly Shares OutstandingDOW Yearly Shares OutstandingYearly Shares Outstanding 2018 2019 2020 2021 2022 2023 200M 400M 600M
DOW Yearly Total Debt VS Total AssetsDOW Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2018 2019 2020 2021 2022 2023 20B 40B 60B 80B

2.2 Solvency

An Altman-Z score of 1.90 indicates that DOW is not a great score, but indicates only limited risk for bankruptcy at the moment.
DOW has a Altman-Z score (1.90) which is in line with its industry peers.
The Debt to FCF ratio of DOW is 20.13, which is on the high side as it means it would take DOW, 20.13 years of fcf income to pay off all of its debts.
DOW has a Debt to FCF ratio (20.13) which is comparable to the rest of the industry.
DOW has a Debt/Equity ratio of 0.89. This is a neutral value indicating DOW is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.89, DOW is not doing good in the industry: 66.27% of the companies in the same industry are doing better.
Industry RankSector Rank
Debt/Equity 0.89
Debt/FCF 20.13
Altman-Z 1.9
ROIC/WACC0.36
WACC8.14%
DOW Yearly LT Debt VS Equity VS FCFDOW Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2017 2018 2019 2020 2021 2022 2023 0 10B 20B 30B

2.3 Liquidity

A Current Ratio of 1.66 indicates that DOW should not have too much problems paying its short term obligations.
The Current ratio of DOW (1.66) is worse than 62.65% of its industry peers.
A Quick Ratio of 1.04 indicates that DOW should not have too much problems paying its short term obligations.
DOW has a worse Quick ratio (1.04) than 66.27% of its industry peers.
Industry RankSector Rank
Current Ratio 1.66
Quick Ratio 1.04
DOW Yearly Current Assets VS Current LiabilitesDOW Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2018 2019 2020 2021 2022 2023 10B 20B 30B

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3

3. Growth

3.1 Past

DOW shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -5.73%.
DOW shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -33.37% yearly.
Looking at the last year, DOW shows a decrease in Revenue. The Revenue has decreased by -5.84% in the last year.
Measured over the past years, DOW shows a decrease in Revenue. The Revenue has been decreasing by -2.09% on average per year.
EPS 1Y (TTM)-5.73%
EPS 3Y10.95%
EPS 5Y-33.37%
EPS Q2Q%-2.08%
Revenue 1Y (TTM)-5.84%
Revenue growth 3Y5%
Revenue growth 5Y-2.09%
Sales Q2Q%1.39%

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 22.19% on average per year.
Based on estimates for the next years, DOW will show a small growth in Revenue. The Revenue will grow by 2.51% on average per year.
EPS Next Y-7.78%
EPS Next 2Y15.77%
EPS Next 3Y20.15%
EPS Next 5Y22.19%
Revenue Next Year-2.97%
Revenue Next 2Y0.19%
Revenue Next 3Y1.32%
Revenue Next 5Y2.51%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
DOW Yearly Revenue VS EstimatesDOW Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 10B 20B 30B 40B 50B
DOW Yearly EPS VS EstimatesDOW Yearly EPS VS EstimatesYearly EPS VS Estimates 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2 4 6 8

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4

4. Valuation

4.1 Price/Earnings Ratio

DOW is valuated rather expensively with a Price/Earnings ratio of 19.34.
DOW's Price/Earnings is on the same level as the industry average.
DOW's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.19.
With a Price/Forward Earnings ratio of 13.79, DOW is valued correctly.
68.67% of the companies in the same industry are more expensive than DOW, based on the Price/Forward Earnings ratio.
DOW is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.37, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 19.34
Fwd PE 13.79
DOW Price Earnings VS Forward Price EarningsDOW Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

DOW's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. DOW is cheaper than 69.88% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as DOW.
Industry RankSector Rank
P/FCF 35.21
EV/EBITDA 9.02
DOW Per share dataDOW EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 20 40 60

4.3 Compensation for Growth

A more expensive valuation may be justified as DOW's earnings are expected to grow with 20.15% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y15.77%
EPS Next 3Y20.15%

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6

5. Dividend

5.1 Amount

DOW has a Yearly Dividend Yield of 6.85%, which is a nice return.
DOW's Dividend Yield is rather good when compared to the industry average which is at 3.26. DOW pays more dividend than 92.77% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.28, DOW pays a better dividend.
Industry RankSector Rank
Dividend Yield 6.85%

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
DOW Yearly Dividends per shareDOW Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2019 2020 2021 2022 2023 2024 0.5 1 1.5 2 2.5

5.3 Sustainability

186.79% of the earnings are spent on dividend by DOW. This is not a sustainable payout ratio.
DP186.79%
EPS Next 2Y15.77%
EPS Next 3Y20.15%
DOW Yearly Income VS Free CF VS DividendDOW Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 0 5B -5B
DOW Dividend Payout.DOW Dividend Payout, showing the Payout Ratio.DOW Dividend Payout.PayoutRetained Earnings

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DOW INC

NYSE:DOW (1/23/2025, 1:20:07 PM)

41.3901

+0.57 (+1.4%)

Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)10-24 2024-10-24/bmo
Earnings (Next)01-30 2025-01-30/amc
Inst Owners70.66%
Inst Owner Change-0.39%
Ins Owners0.13%
Ins Owner Change1.08%
Market Cap28.98B
Analysts67.41
Price Target52.66 (27.23%)
Short Float %2.16%
Short Ratio1.89
Dividend
Industry RankSector Rank
Dividend Yield 6.85%
Yearly Dividend2.8
Dividend Growth(5Y)N/A
DP186.79%
Div Incr Years0
Div Non Decr Years5
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.99%
Min EPS beat(2)-5.89%
Max EPS beat(2)1.91%
EPS beat(4)3
Avg EPS beat(4)6.04%
Min EPS beat(4)-5.89%
Max EPS beat(4)22.54%
EPS beat(8)6
Avg EPS beat(8)9.21%
EPS beat(12)10
Avg EPS beat(12)8.31%
EPS beat(16)14
Avg EPS beat(16)9.42%
Revenue beat(2)1
Avg Revenue beat(2)-0.32%
Min Revenue beat(2)-1.83%
Max Revenue beat(2)1.19%
Revenue beat(4)2
Avg Revenue beat(4)0%
Min Revenue beat(4)-1.83%
Max Revenue beat(4)1.43%
Revenue beat(8)5
Avg Revenue beat(8)0.5%
Revenue beat(12)7
Avg Revenue beat(12)1.15%
Revenue beat(16)11
Avg Revenue beat(16)2.1%
PT rev (1m)-7.97%
PT rev (3m)-9.67%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-57.21%
EPS NY rev (1m)0%
EPS NY rev (3m)-21.07%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-5.88%
Revenue NY rev (1m)-0.09%
Revenue NY rev (3m)-0.3%
Valuation
Industry RankSector Rank
PE 19.34
Fwd PE 13.79
P/S 0.67
P/FCF 35.21
P/OCF 7.71
P/B 1.58
P/tB 3.72
EV/EBITDA 9.02
EPS(TTM)2.14
EY5.17%
EPS(NY)3
Fwd EY7.25%
FCF(TTM)1.18
FCFY2.84%
OCF(TTM)5.37
OCFY12.96%
SpS61.68
BVpS26.16
TBVpS11.12
PEG (NY)N/A
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 1.77%
ROE 5.75%
ROCE 3.85%
ROIC 2.93%
ROICexc 3.11%
ROICexgc 4.04%
OM 4.33%
PM (TTM) 2.44%
GM 10.76%
FCFM 1.91%
ROA(3y)6.16%
ROA(5y)3.64%
ROE(3y)19.89%
ROE(5y)11.88%
ROIC(3y)8.04%
ROIC(5y)6.66%
ROICexc(3y)8.62%
ROICexc(5y)7.15%
ROICexgc(3y)11.41%
ROICexgc(5y)9.54%
ROCE(3y)10.6%
ROCE(5y)8.79%
ROICexcg growth 3Y-7.66%
ROICexcg growth 5Y-10.48%
ROICexc growth 3Y-6.32%
ROICexc growth 5Y-11.02%
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%
F-Score4
Asset Turnover0.73
Health
Industry RankSector Rank
Debt/Equity 0.89
Debt/FCF 20.13
Debt/EBITDA 3.48
Cap/Depr 104.75%
Cap/Sales 6.79%
Interest Coverage 250
Cash Conversion 80.41%
Profit Quality 78.23%
Current Ratio 1.66
Quick Ratio 1.04
Altman-Z 1.9
F-Score4
WACC8.14%
ROIC/WACC0.36
Cap/Depr(3y)78.03%
Cap/Depr(5y)68.98%
Cap/Sales(3y)4.17%
Cap/Sales(5y)4.07%
Profit Quality(3y)230.22%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-5.73%
EPS 3Y10.95%
EPS 5Y-33.37%
EPS Q2Q%-2.08%
EPS Next Y-7.78%
EPS Next 2Y15.77%
EPS Next 3Y20.15%
EPS Next 5Y22.19%
Revenue 1Y (TTM)-5.84%
Revenue growth 3Y5%
Revenue growth 5Y-2.09%
Sales Q2Q%1.39%
Revenue Next Year-2.97%
Revenue Next 2Y0.19%
Revenue Next 3Y1.32%
Revenue Next 5Y2.51%
EBIT growth 1Y-20.11%
EBIT growth 3Y-6.55%
EBIT growth 5Y-17.45%
EBIT Next Year96.69%
EBIT Next 3Y35.3%
EBIT Next 5Y24.17%
FCF growth 1Y-85.27%
FCF growth 3Y-17.08%
FCF growth 5Y5.8%
OCF growth 1Y-52.89%
OCF growth 3Y-5.85%
OCF growth 5Y4.08%