DOW INC (DOW) Stock Fundamental Analysis
NYSE:DOW - New York Stock Exchange, Inc. - US2605571031 - Common Stock - Currency: USD
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. DOW may be in some trouble as it scores bad on both profitability and health. DOW is valied quite expensively at the moment, while it does show a decent growth rate.
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.
In the past 5 years DOW has always been 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 1.93%, DOW is in line with its industry, outperforming 50.60% of the companies in the same industry.
With a Return On Equity value of 6.36%, DOW perfoms like the industry average, outperforming 53.01% of the companies in the same industry.
With a Return On Invested Capital value of 3.03%, DOW is not doing good in the industry: 66.27% of the companies in the same industry are doing better.
Measured over the past 3 years, the Average Return On Invested Capital for DOW is in line with the industry average of 6.65%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.93% | ||
| ROE | 6.36% | ||
| ROIC | 3.03% |
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 (2.57%) which is in line with its industry peers.
In the last couple of years the Profit Margin of DOW has declined.
DOW's Operating Margin of 4.43% is on the low side compared to the rest of the industry. DOW is outperformed by 67.47% of its industry peers.
DOW's Operating Margin has declined in the last couple of years.
DOW's Gross Margin of 10.72% is on the low side compared to the rest of the industry. DOW is outperformed by 81.93% of its industry peers.
DOW's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.43% | ||
| PM (TTM) | 2.57% | ||
| GM | 10.72% |
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.
The number of shares outstanding for DOW remains at a similar level compared to 1 year ago.
Compared to 5 years ago, DOW has less shares outstanding
DOW has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 1.92 indicates that DOW is not a great score, but indicates only limited risk for bankruptcy at the moment.
DOW has a Altman-Z score (1.92) which is in line with its industry peers.
DOW has a Debt/Equity ratio of 0.91. This is a neutral value indicating DOW is somewhat dependend on debt financing.
The Debt to Equity ratio of DOW (0.91) is worse than 66.27% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.92 |
ROIC/WACC0.36
WACC8.5%
2.3 Liquidity
DOW has a Current Ratio of 1.61. This is a normal value and indicates that DOW is financially healthy and should not expect problems in meeting its short term obligations.
DOW has a worse Current ratio (1.61) than 65.06% of its industry peers.
A Quick Ratio of 0.98 indicates that DOW may have some problems paying its short term obligations.
DOW has a Quick ratio of 0.98. This is in the lower half of the industry: DOW underperforms 65.06% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.61 | ||
| Quick Ratio | 0.98 |
3. Growth
3.1 Past
DOW shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -23.66%.
The earnings per share for DOW have been decreasing by -12.16% on average. This is quite bad
DOW shows a decrease in Revenue. In the last year, the revenue decreased by -3.72%.
The Revenue has been growing slightly by 0.01% on average over the past years.
EPS 1Y (TTM)-23.66%
EPS 3Y-42.47%
EPS 5Y-12.16%
EPS Q2Q%-100%
Revenue 1Y (TTM)-3.72%
Revenue growth 3Y-7.88%
Revenue growth 5Y0.01%
Sales Q2Q%-2.03%
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 37.43% on average per year.
Based on estimates for the next years, DOW will show a small growth in Revenue. The Revenue will grow by 3.96% on average per year.
EPS Next Y5.37%
EPS Next 2Y23.47%
EPS Next 3Y24.79%
EPS Next 5Y37.43%
Revenue Next Year0.38%
Revenue Next 2Y2.37%
Revenue Next 3Y2.62%
Revenue Next 5Y3.96%
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 23.11, 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.
DOW is valuated rather cheaply when we compare the Price/Earnings ratio to 29.63, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 21.93, 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.
The average S&P500 Price/Forward Earnings ratio is at 22.68. DOW is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.11 | ||
| Fwd PE | 21.93 |
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 8.73 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
DOW's earnings are expected to grow with 24.79% in the coming years. This may justify a more expensive valuation.
PEG (NY)4.3
PEG (5Y)N/A
EPS Next 2Y23.47%
EPS Next 3Y24.79%
5. Dividend
5.1 Amount
DOW has a Yearly Dividend Yield of 7.30%, which is a nice return.
DOW's Dividend Yield is rather good when compared to the industry average which is at 3.27. DOW pays more dividend than 93.98% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, DOW pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.3% |
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
DOW pays out 178.08% of its income as dividend. This is not a sustainable payout ratio.
DP178.08%
EPS Next 2Y23.47%
EPS Next 3Y24.79%
39.51
-0.08 (-0.2%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners70.66%
Inst Owner Change-2.58%
Ins Owners0.13%
Ins Owner Change0.01%
Market Cap27.81B
Analysts68.46
Price Target49.23 (24.6%)
Short Float %2.1%
Short Ratio1.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.3% |
Yearly Dividend2.8
Dividend Growth(5Y)N/A
DP178.08%
Div Incr Years0
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-49.05%
Min EPS beat(2)-100%
Max EPS beat(2)1.91%
EPS beat(4)2
Avg EPS beat(4)-20.36%
Min EPS beat(4)-100%
Max EPS beat(4)22.54%
EPS beat(8)6
Avg EPS beat(8)-0.67%
EPS beat(12)9
Avg EPS beat(12)-0.39%
EPS beat(16)13
Avg EPS beat(16)1.94%
Revenue beat(2)1
Avg Revenue beat(2)-0.4%
Min Revenue beat(2)-1.99%
Max Revenue beat(2)1.19%
Revenue beat(4)1
Avg Revenue beat(4)-0.85%
Min Revenue beat(4)-1.99%
Max Revenue beat(4)1.19%
Revenue beat(8)5
Avg Revenue beat(8)0.53%
Revenue beat(12)7
Avg Revenue beat(12)1.03%
Revenue beat(16)10
Avg Revenue beat(16)1.62%
PT rev (1m)-6.52%
PT rev (3m)-16.03%
EPS NQ rev (1m)-86.6%
EPS NQ rev (3m)-91.5%
EPS NY rev (1m)-39.98%
EPS NY rev (3m)-42.66%
Revenue NQ rev (1m)-6.24%
Revenue NQ rev (3m)-9.48%
Revenue NY rev (1m)-3.1%
Revenue NY rev (3m)-3.85%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.11 | ||
| Fwd PE | 21.93 | ||
| P/S | 0.65 | ||
| P/FCF | N/A | ||
| P/OCF | 9.54 | ||
| P/B | 1.6 | ||
| P/tB | 3.93 | ||
| EV/EBITDA | 8.73 |
EPS(TTM)1.71
EY4.33%
EPS(NY)1.8
Fwd EY4.56%
FCF(TTM)-0.04
FCFYN/A
OCF(TTM)4.14
OCFY10.48%
SpS61.04
BVpS24.66
TBVpS10.04
PEG (NY)4.3
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.93% | ||
| ROE | 6.36% | ||
| ROCE | 4.05% | ||
| ROIC | 3.03% | ||
| ROICexc | 3.18% | ||
| ROICexgc | 4.12% | ||
| OM | 4.43% | ||
| PM (TTM) | 2.57% | ||
| GM | 10.72% | ||
| 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 Turnover0.75
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 3.3 | ||
| Cap/Depr | 101.59% | ||
| Cap/Sales | 6.84% | ||
| Interest Coverage | 2.15 | ||
| Cash Conversion | 60.72% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.61 | ||
| Quick Ratio | 0.98 | ||
| Altman-Z | 1.92 |
F-Score5
WACC8.5%
ROIC/WACC0.36
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)-23.66%
EPS 3Y-42.47%
EPS 5Y-12.16%
EPS Q2Q%-100%
EPS Next Y5.37%
EPS Next 2Y23.47%
EPS Next 3Y24.79%
EPS Next 5Y37.43%
Revenue 1Y (TTM)-3.72%
Revenue growth 3Y-7.88%
Revenue growth 5Y0.01%
Sales Q2Q%-2.03%
Revenue Next Year0.38%
Revenue Next 2Y2.37%
Revenue Next 3Y2.62%
Revenue Next 5Y3.96%
EBIT growth 1Y-9.29%
EBIT growth 3Y-37.72%
EBIT growth 5Y-11.56%
EBIT Next Year118.32%
EBIT Next 3Y40.61%
EBIT Next 5Y34.19%
FCF growth 1Y-100.92%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-43.92%
OCF growth 3Y-25.36%
OCF growth 5Y-13.25%