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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Dow Inc. (XNYS:DOW) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
DOW
Name:
Dow Inc. (XNYS:DOW)
Sector:
1.29B
Industry:
Chemicals
CEO:
Mr. James Fitterling
Total Employees:
35,700
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -89.75% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF DOW INC.(DOW) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CHEMICALS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
49.31
One Month Price Target:
$49.68
Six Month Price Target :
$51.55
Likely Price in One Year's Time:
Ticker:
$53.78
Likely Trading Range Today Under (Normal Volatility)
$49.09
Price Upper limit ($) :
$49.56
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$46.51
This week:
$43.06
This month :
$36.8
Other Primary facts
Market Cap:
34.90B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
718.17M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
20.91%
-21.66%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$62.29
$56.36
$36.33
$42.26
Medium risk (<10%) entry points
Buy Call
Sell Call
$54.43
Buy Put:
Sell Put:
$53.16
$44.18
$45.46
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
DOW
Sharpe Ratio:
0.70%
Comparison:
DOW, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -41.92% lower than the industry
& is -69.35% lower than the market/S&P 500 average
Average Returns/Yield of
DOW
Daily returns:
0.03%
Weekly returns:
0.14%
Monthly returns:
0.56%
Yearly returns:
10.16%
Comparison of returns:
Average annual returns/yield (last 3 years) is -33.28% below industry average
Classification:
DOW, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.15
Statistical test of Returns:
DOW has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.77%
Weekly Volatility:
6.20%
Monthly Volatility:
12.41%
Yearly Volatility:
42.99%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.46%
Volatility in last five trading days has been -47.23% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.67%
Weekly VaR:
-12.68%
Monthly VaR:
-25.36%
How Much Can the price of
DOW
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-22%
Worst case (decline):
-87.85%
This translates to price declining to:
$38.41
This translates to price declining to:
$5.99
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
DOW is a 78.99% riskier investment compared to the market/S&P 500 & is 53.34% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 0.95% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
DOW
Beta in relation to market/S&P 500--1.35
Expected beta in 1 year's time:
0.807
Expected beta in 3 year's time:
1.141
Unlevered (debt free) Beta:
0.828
Beta in relation to Nasdaq (XNAS):
0.798
Beta in relation to all global stocks::
0.965
Beta Comparison & Analysis
Beta of competitors/peers::
1.021
Beta is 32.22% higher than peers
Average Industry Beta:
1.371
Beta is -1.52% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
26.45%
Sustainable growth rate is 41.66% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.056
Alpha is 135.92% above industry average alpha yield
Alpha is -358% below the market average
Analysis of Cost of Capital of
DOW
Equity cost of capital:
0.124
Equity cost of capital is -1.14% below industry mean WACC
Unlevered (without debt) cost of capital:
7.60%
Before-tax cost of debt:
4.40%
After-tax cost of debt:
3.48%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.48%
WACC is 5.64% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$81.25
Revenue growth rate per share of (3Y):
1.82
Annual revenue growth rate is -246.80% below industry average
EPS:
$9.18
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$8.91
Balance sheet equity growth per share: -43.66%
Equity growth rate per share is -1503.68% lower than the industry
Debt per share
$21.16
EBITDA per share
$17.26
Valuation Analysis Today of
DOW
P/E Ratio:
5.52
P/E Ratio of Competitors/Peers:
20.44
P/E ratio is -72.97% lower than main peers & is -53.98% lower than the industry
Stock price/value with industry average P/E ratio: $110.20
DOW is -55.26% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $37.84
Present value of the expected future dividends only: $22.59
P/S (Price to Sales ratio):
0.61
Price to sales ratio is -49.11% below the industry mean
P/B (Price to book value ratio):
1.82
Price to free cash flow: 5.54
-
Net income growth rate (3Y):
41.48%
Net income growth rate is -55.09% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 7.45%
Dividend yeild: 5.68%
Previous Dividend: $0.70
Previous adjusted dividend: $0.70
Previous Dividend: $2.80
-
-
Average dividend payment (long-term): $0.70
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 09/08/2022
Expected next dividend record date: 29/08/2022
Expected next dividend declaration date: 07/12/2022
Previous dividend payment date: 06/10/2022
Previous dividend record date: 31/05/2022
Previous dividend declaration date: 13/04/2022
Dividend History:
2022-05-27--$0.70
2021-11-29--$0.70
2021-05-27--$0.70
2022-02-25--$0.70
2021-08-30--$0.70
2021-02-25--$0.70
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
80.51%
Net debt to equity ratio:
67.85%
Debt to assets ratio:
24.00%
Net debt to assets ratio:
20.23%
Debt-to-asset ratio is -61.64% below industry average
Ability to repay debt:
Interest coverage ratio:
17.66
Interest coverage ratio is 37.53% more than industry average
Looking forward:
Debt growth rate:
-15.28%
Annual debt growth is -114% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.39%
Analysis of Key Statistics
Correlation of price movement with the market:
0.664
Statistical significance of correlation:
DOW has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.682
Stock price is -2.53% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.682
Correlation of price movement with Nasdaq (^IXIC):
0.016
Covariance of price movement with the market:
0.026
Kurtosis
12.611
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-0.488
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
DOW
Gross Profit Margin Ratio:
81%
Operating Profit Margin Ratio:
15.06%
Operating profit margin is 54.43% higher than the industry
Net Profit Margin Ratio:
81%
Effective Tax Rate:
21.70%
Effective tax rate is 15.14% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
36.49%
Return on equity (ROE) is 47.97% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
10.88%
Return on assets (ROA) is 35.91% higher than the industry
Financial Leverage:
1.3x
Current Ratio:
1.7
Current ratio is 1.42% above industry average
Cash Conversion Cycle (days):
32.4
Cash conversion cycle is -14.19% below industry average
The remaining useful life of property plant & equipment is: 3.7 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
1.6M
Each employee generates 46% more revenue than industry average revenue per employee
EBITDA generated per employee:
347.2K
Each employee generates 56% more EBITDA than industry average revenue per employee
Profit generated per employee:
193.0K
Each employee generates 41% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
36.0K
Each employee generates -5408% less free cash flow than industry average revenue per employee
Assets/Capital per employee
1.2M
Each employee generates -5408% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 11.59%
Growth rate in R&D investment/expenditure is 272.59% higher than the industry
Competitors/Peer firms of
DOW
NEWMONT CORPORATION (XNYS:NEM)
DuPont de Nemours, Inc. (XNYS:DD)
SOUTHERN COPPER CORPORATION (XNYS:SCCO)
BARRICK GOLD CORPORATION (XNYS:GOLD)
CRH PUBLIC LIMITED COMPANY (XNYS:CRH)
AIR PRODUCTS AND CHEMICALS, INC. (XNYS:APD)
FREEPORT-MCMORAN INC. (XNYS:FCX)
LyondellBasell Industries NV (XNYS:LYB)
ECOLAB INC. (XNYS:ECL)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�0%
Sell�0%
Strong sell�4%
Overall analyst sentiment is: Strong sell
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
58.35B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
46.53B
11.82B
881.00M
1.78B
1.78B
-
375.00M
3.03B
75.00M
702.00M
2.88B
12.39B
8.79B
6.89B
8.88B
1.93B
6.89B
Statement of Cash Flow
Date:
Period:
752.00M
Differed Income Tax :
253.00M
Stock Based Compensation :
-
Change in Working Capital :
- 1591000.00K
Accounts Receivables:
-
Other Working Capital:
- 493000.00K
Other Non-Cash Items:
637.00M
Net Cash Provided by Operating Activities:
1.60B
Investments in PP&E:
- 2000.00K
Net Acquisitions:
5.00M
Purchases of Investments:
- 185000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
3.14B
-
3.14B
9.96B
7.76B
1.30B
22.17B
21.69B
8.72B
2.76B
4.89B
1.16B
1.96B
41.17B
-
63.34B
5.77B
753.00M
527.00M
-
6.53B
13.05B
15.20B
15.00B
30.86B
-
43.91B
8.00M
21.67B
- 8796000.0K
-
March 31, 2022 at 6:00:00 AM
49.56B
18.88B
62.79B
-
15.95B
12.8B
141.00M
- 326000.00K
- 367000.00K
- 60000.00K
35.00M
- 600000.00K
- 513000.00K
121.00M
- 1017000.00K
- 45000.00K
110.00M
3.14B
3.03B
1.60B
- 317000.00K
1.29B
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
DOW
2023
2024
2025
2026
2027
$54.05
$101.65
$110.87
$120.93
$131.90