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.


Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Best stocks for October and worst stocks for October


Special Offers from Schaeffer's Trading Partners