Dow Stock Just Clocked a Nearly 2-Year Low, Now What?

DOW has fallen nearly 20% in the past month

facebook twitter linkedin

Dow Inc. (NYSE:DOW) is a commodity chemical company with 35,700 employees maintaining operations across 104 manufacturing sites and 31 countries. The equity is coming up in the earnings confessional, scheduled to report second-quarter results before the open this coming Thursday, July 21. At last glance, DOW is trading up 1.6% at $49.65.

On Thursday, July 14, Dow announced that its post-consumer recycled-rich resins, REVOLOOP, are the first polyethylene compounds to be certified for plastics recycling traceability and recycled content. The certification was granted by AENOR, a global company that provides conformity assessments.

However, shares of DOW also hit a more than 52-week low of $48.27 on the same day as that announcement. Additionally, Dow stock is down 14% year-to-date and have fallen 17% just over the past month. Overall, Dow stock has decreased about 19% over the past 12 months and has shed 32% since reaching a 52-week high of $71.86 in early May.

Dow stock now offers an extremely high dividend yield of 5.64% with a forward dividend of $2.80. DOW now also provides a low valuation at a forward price-earnings ratio of 6.53 and a price-sales ratio of 0.66. Nonetheless, the commodity chemicals company comes with $15.97 billion in total debt, which is a significant amount relative to its market cap of $35.6 billion. Dow also holds just $3.39 billion in cash on their balance sheet.

The commodity chemicals company has struggled to find consistency in recent years, reporting a 40.3% decline in revenues for fiscal 2019 and a 10.3% decline in revenues for fiscal 2020. DOW also reported $1.36 billion in net losses for fiscal 2019, which marked a $5.86 billion decrease in net income. Furthermore, Dow is estimated to end fiscal 2022 with 8.3% revenue growth and a 10.4% decrease in earnings. The company is also expected to see a 2.8% decline in revenues and an 8.3% decrease in earning for fiscal 2023, which is in line with its past performance. In general, DOW's declining business model makes Dow stock an unsafe long-term investment.


If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Stock Pick Report


Special Offers from Schaeffer's Trading Partners