DOW INC (DOW)
US2605571031 - Common Stock
DOW gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 83 industry peers in the Chemicals industry. DOW may be in some trouble as it scores bad on both profitability and health. DOW has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year DOW was profitable.
DOW had a positive operating cash flow in the past year.
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.
1.2 Ratios
DOW has a Return On Assets (1.77%) which is in line with its industry peers.
With a Return On Equity value of 5.75%, DOW perfoms like the industry average, outperforming 50.60% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 2.93%, DOW is doing worse than 66.27% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for DOW is in line with the industry average of 7.24%.
The 3 year average ROIC (8.04%) for DOW is well above the current ROIC(2.93%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector 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%
1.3 Margins
With a Profit Margin value of 2.44%, DOW perfoms like the industry average, outperforming 44.58% of the companies in the same industry.
DOW's Profit Margin has declined in the last couple of years.
DOW's Operating Margin of 4.33% is on the low side compared to the rest of the industry. DOW is outperformed by 68.67% of its industry peers.
In the last couple of years the Operating Margin of DOW has declined.
With a Gross Margin value of 10.76%, DOW is not doing good in the industry: 81.93% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of DOW has declined.
| Industry Rank | Sector 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%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), DOW is creating some 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.
2.2 Solvency
An Altman-Z score of 1.89 indicates that DOW is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of DOW (1.89) is comparable to the rest of the industry.
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.
Looking at the Debt to FCF ratio, with a value of 20.13, DOW is in line with its industry, outperforming 40.96% of the companies in the same industry.
DOW has a Debt/Equity ratio of 0.89. This is a neutral value indicating DOW is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.89, DOW is doing worse than 66.27% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.89 | ||
| Debt/FCF | 20.13 | ||
| Altman-Z | 1.89 |
ROIC/WACC0.39
WACC7.42%
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.
DOW has a Quick Ratio of 1.04. This is a normal value and indicates that DOW is financially healthy and should not expect problems in meeting its short term obligations.
DOW's Quick ratio of 1.04 is on the low side compared to the rest of the industry. DOW is outperformed by 66.27% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.66 | ||
| Quick Ratio | 1.04 |
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%.
Measured over the past years, DOW shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -33.37% on average per year.
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
The Earnings Per Share is expected to grow by 22.19% on average over the next years. This is a very strong growth
DOW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.51% yearly.
EPS Next Y-7.78%
EPS Next 2Y15.77%
EPS Next 3Y20.15%
EPS Next 5Y22.19%
Revenue Next Year-2.89%
Revenue Next 2Y0.36%
Revenue Next 3Y1.26%
Revenue Next 5Y2.51%
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 18.66, which indicates a rather expensive current valuation of DOW.
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 27.20, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 13.30, DOW is valued correctly.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DOW indicates a somewhat cheap valuation: DOW is cheaper than 65.06% of the companies listed in the same industry.
DOW is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.73, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.66 | ||
| Fwd PE | 13.3 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DOW is valued a bit cheaper than the industry average as 66.27% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of DOW is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.98 | ||
| EV/EBITDA | 8.89 |
4.3 Compensation for Growth
DOW's earnings are expected to grow with 20.15% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y15.77%
EPS Next 3Y20.15%
5. Dividend
5.1 Amount
DOW has a Yearly Dividend Yield of 7.16%, which is a nice return.
In the last 3 months the price of DOW has falen by -22.76%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
DOW's Dividend Yield is rather good when compared to the industry average which is at 3.35. DOW pays more dividend than 91.57% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, DOW pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.16% |
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 186.79% of its income as dividend. This is not a sustainable payout ratio.
DP186.79%
EPS Next 2Y15.77%
EPS Next 3Y20.15%
DOW INC
NYSE:DOW (12/20/2024, 8:05:46 PM)
Premarket: 40.12 +0.18 (+0.45%)39.94
+0.84 (+2.15%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners70.66%
Inst Owner Change1.13%
Ins Owners0.13%
Ins Owner Change1.08%
Market Cap27.96B
Analysts66.43
Price Target57.23 (43.29%)
Short Float %2.2%
Short Ratio2.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.16% |
Dividend Growth(5Y)N/A
DP186.79%
Div Incr Years0
Div Non Decr Years5
Ex-Date
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)-2.38%
PT rev (3m)-4.05%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-57.21%
EPS NY rev (1m)-1.68%
EPS NY rev (3m)-21.07%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-5.88%
Revenue NY rev (1m)-0.14%
Revenue NY rev (3m)-0.92%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.66 | ||
| Fwd PE | 13.3 | ||
| P/S | 0.65 | ||
| P/FCF | 33.98 | ||
| P/OCF | 7.44 | ||
| P/B | 1.53 | ||
| P/tB | 3.59 | ||
| EV/EBITDA | 8.89 |
EPS(TTM)2.14
EY5.36%
EPS(NY)3
Fwd EY7.52%
FCF(TTM)1.18
FCFY2.94%
OCF(TTM)5.37
OCFY13.43%
SpS61.68
BVpS26.16
TBVpS11.12
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector 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 Rank | Sector 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 | 1.89 |
F-Score4
WACC7.42%
ROIC/WACC0.39
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-2.89%
Revenue Next 2Y0.36%
Revenue Next 3Y1.26%
Revenue Next 5Y2.51%
EBIT growth 1Y-20.11%
EBIT growth 3Y-6.55%
EBIT growth 5Y-17.45%
EBIT Next Year100.07%
EBIT Next 3Y38.4%
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%