Rating Change #2
The Dow Chemical Co (DOW) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- DOW's revenue growth has slightly outpaced the industry average of 14.2%. Since the same quarter one year prior, revenues rose by 17.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- DOW CHEMICAL reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DOW CHEMICAL increased its bottom line by earning $1.73 versus $0.16 in the prior year. This year, the market expects an improvement in earnings ($2.65 versus $1.73).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Chemicals industry average. The net income increased by 50.8% when compared to the same quarter one year prior, rising from $597.00 million to $900.00 million.
- Net operating cash flow has increased to $1,238.00 million or 25.81% when compared to the same quarter last year. Despite an increase in cash flow, DOW CHEMICAL's average is still marginally south of the industry average growth rate of 30.26%.
The Dow Chemical Company manufactures and supplies products used as raw materials in the production of customer products and services worldwide. The company has a P/E ratio of 11.5, equal to the average chemicals industry P/E ratio and below the S&P 500 P/E ratio of 17.7. The Dow Chemical has a market cap of $33.3 billion and is part of the basic materials sector and chemicals industry. Shares are down 17.5% year to date as of the close of trading on Wednesday.You can view the full The Dow Chemical Ratings Report or get investment ideas from our investment research center.
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