Dow logged a -0.9% change during today's evening session, and is now trading at a price of $50.82 per share.
Over the last year, Dow logged a -0.5% change, with its stock price reaching a high of $60.88 and a low of $47.26. Over the same period, the stock underperformed the S&P 500 index by -15.5%. As of April 2023, the company's 50-day average price was $50.24. Dow Inc., through its subsidiaries, engages in the provision of various materials science solutions for packaging, infrastructure, mobility, and consumer applications in the United States, Canada, Europe, the Middle East, Africa, India, the Asia Pacific, and Latin America. Based in Midland, MI, the large-cap Industrials company has 37,800 full time employees. Dow has offered a 5.5% dividend yield over the last 12 months.
The Business Has Weak Operating Margins:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $49,604 | $42,951 | $38,542 | $54,968 | $56,902 | $45,860 |
| Revenue Growth | n/a | -13.41% | -10.27% | 42.62% | 3.52% | -19.41% |
| Operating Margins | 8% | -3% | 5% | 15% | 11% | 7% |
| Net Margins | 10% | 0% | 3% | 12% | 8% | 10% |
| Net Income (MM) | $4,775 | $87 | $1,294 | $6,405 | $4,640 | $4,640 |
| Net Interest Expense (MM) | $1,143 | $933 | $1,269 | $731 | $727 | $724 |
| Depreciation & Amort. (MM) | $2,909 | $2,156 | $2,874 | $2,842 | $2,758 | $2,608 |
| Free Cash Flow (MM) | $2,163 | $5,930 | $5,000 | $5,568 | $5,663 | $3,421 |
| Current Ratio | 2.53 | 1.57 | 1.72 | 1.58 | 1.81 | 1.79 |
| Total Debt (MM) | $21,341 | $25,311 | $19,233 | $17,511 | $17,698 | $16,950 |
| Net Debt / EBITDA | 2.79 | 25.24 | 2.86 | 1.32 | 1.56 | 2.44 |
Dow has weak operating margins with a stable trend, irregular cash flows, and a highly leveraged balance sheet. Dow has weak revenue growth and a flat capital expenditure trend and positive expected EPS Growth.
A Lower P/B Ratio Than Its Sector Average but Trades Above Its Graham Number:
Dow has a trailing twelve month P/E ratio of 27.3, compared to an average of 22.19 for the Industrials sector. Based on its EPS guidance of $3.34, the company has a forward P/E ratio of 15.0. In contrast, the market is likely undervaluing Dow in terms of its equity because its P/B ratio is 1.82 while the sector average is 4.06. The company's shares are currently trading 44.1% above their Graham number.
Dow Has an Average Rating of Hold:
The 20 analysts following Dow have set target prices ranging from $47.0 to $62.0 per share, for an average of $54.5 with a hold rating. As of April 2023, the company is trading -7.8% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Dow has a very low short interest because 1.7% of the company's shares are sold short. Institutions own 66.0% of the company's shares, and the insider ownership rate stands at 0.15%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $3,130,756,069.
