DOW INC (DOW) Stock Fundamental Analysis
NYSE:DOW - New York Stock Exchange, Inc. - US2605571031 - Common Stock - Currency: USD
DOW gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 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.
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
With a Return On Assets value of 1.93%, DOW perfoms like the industry average, outperforming 52.94% of the companies in the same industry.
DOW's Return On Equity of 6.36% is fine compared to the rest of the industry. DOW outperforms 61.18% of its industry peers.
With a Return On Invested Capital value of 3.03%, DOW is not doing good in the industry: 62.35% of the companies in the same industry are doing better.
DOW had an Average Return On Invested Capital over the past 3 years of 4.98%. This is below the industry average of 7.01%.
| 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
The Profit Margin of DOW (2.57%) is comparable to the rest of the industry.
DOW's Profit Margin has declined in the last couple of years.
The Operating Margin of DOW (4.43%) is worse than 65.88% of its industry peers.
In the last couple of years the Operating Margin of DOW has declined.
DOW has a Gross Margin of 10.72%. This is amonst the worse of the industry: DOW underperforms 80.00% of its industry peers.
In the last couple of years the Gross Margin of DOW has declined.
| 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.
DOW has less shares outstanding than it did 5 years ago.
The debt/assets ratio for DOW is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.80, we must say that DOW is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.80, DOW is in line with its industry, outperforming 54.12% of the companies in the same industry.
DOW has a Debt/Equity ratio of 0.91. This is a neutral value indicating DOW is somewhat dependend on debt financing.
DOW has a worse Debt to Equity ratio (0.91) than 65.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.8 |
ROIC/WACC0.38
WACC8.07%
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.
With a Current ratio value of 1.61, DOW is not doing good in the industry: 60.00% of the companies in the same industry are doing better.
A Quick Ratio of 0.98 indicates that DOW may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.98, DOW is in line with its industry, outperforming 44.71% of the companies in the same industry.
| 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%.
Measured over the past years, DOW shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -12.16% on average per year.
The Revenue has decreased by -3.72% 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)-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
The Earnings Per Share is expected to grow by 34.80% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 3.41% on average over the next years.
EPS Next Y-14.3%
EPS Next 2Y13.11%
EPS Next 3Y17.92%
EPS Next 5Y34.8%
Revenue Next Year-0.71%
Revenue Next 2Y1.69%
Revenue Next 3Y2.22%
Revenue Next 5Y3.41%
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.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 16.46 indicates a correct 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 28.29, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 19.21, which indicates a rather expensive current valuation of DOW.
DOW's Price/Forward Earnings is on the same level as the industry average.
DOW is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.08, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.46 | ||
| Fwd PE | 19.21 |
4.2 Price Multiples
67.06% 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 | 7.06 |
4.3 Compensation for Growth
DOW's earnings are expected to grow with 17.92% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y13.11%
EPS Next 3Y17.92%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 9.95%, DOW is a good candidate for dividend investing.
In the last 3 months the price of DOW has falen by -31.41%. 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 4.02. DOW pays more dividend than 95.29% of the companies in the same industry.
DOW's Dividend Yield is rather good when compared to the S&P500 average which is at 2.52.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.95% |
5.2 History
DOW has paid a dividend for at least 10 years, which is a reliable track record.
DOW has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
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 2Y13.11%
EPS Next 3Y17.92%
28.15
+0.68 (+2.48%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners68.11%
Inst Owner Change0.03%
Ins Owners0.14%
Ins Owner Change14.29%
Market Cap19.87B
Analysts67.69
Price Target46.41 (64.87%)
Short Float %2.86%
Short Ratio2.7
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.95% |
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)-1.8%
PT rev (3m)-11.88%
EPS NQ rev (1m)-112.54%
EPS NQ rev (3m)-101.64%
EPS NY rev (1m)-18.67%
EPS NY rev (3m)-51.19%
Revenue NQ rev (1m)-0.61%
Revenue NQ rev (3m)-6.81%
Revenue NY rev (1m)-0.71%
Revenue NY rev (3m)-4.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.46 | ||
| Fwd PE | 19.21 | ||
| P/S | 0.46 | ||
| P/FCF | N/A | ||
| P/OCF | 6.82 | ||
| P/B | 1.14 | ||
| P/tB | 2.81 | ||
| EV/EBITDA | 7.06 |
EPS(TTM)1.71
EY6.07%
EPS(NY)1.47
Fwd EY5.21%
FCF(TTM)-0.04
FCFYN/A
OCF(TTM)4.13
OCFY14.67%
SpS60.88
BVpS24.59
TBVpS10.02
PEG (NY)N/A
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 | 1.8 |
F-Score5
WACC8.07%
ROIC/WACC0.38
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 Y-14.3%
EPS Next 2Y13.11%
EPS Next 3Y17.92%
EPS Next 5Y34.8%
Revenue 1Y (TTM)-3.72%
Revenue growth 3Y-7.88%
Revenue growth 5Y0.01%
Sales Q2Q%-2.03%
Revenue Next Year-0.71%
Revenue Next 2Y1.69%
Revenue Next 3Y2.22%
Revenue Next 5Y3.41%
EBIT growth 1Y-9.29%
EBIT growth 3Y-37.72%
EBIT growth 5Y-11.56%
EBIT Next Year102.9%
EBIT Next 3Y37.19%
EBIT Next 5Y35.51%
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%