Dow Chemical Co

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DOW : NYSE : Basic Materials
$53.78 up 0.28 | 0.52%
Today's Range: 53.25 - 53.99
Avg. Daily Volume: 6,725,700
08/23/16 - 4:01 PM ET

Financial Analysis


DOW CHEMICAL's gross profit margin for the second quarter of its fiscal year 2016 has increased when compared to the same period a year ago. Even though sales decreased, the net income has increased, representing an increase to the bottom line. DOW CHEMICAL has average liquidity. Currently, the Quick Ratio is 1.29 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has increased by 22.54% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)11952.012910.0
EBITDA ($mil)2233.02080.0
EBIT ($mil)1581.01471.0
Net Income ($mil)3208.01220.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)7309.06224.0
Total Assets ($mil)81524.069334.0
Total Debt ($mil)21346.019748.0
Equity ($mil)28936.023612.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin28.025.38
EBITDA Margin18.6816.11
Operating Margin13.2311.39
Sales Turnover0.570.78
Return on Assets10.366.42
Return on Equity28.0217.42
Debt Q2 FY16 Q2 FY15
Current Ratio2.041.94
Debt/Capital0.420.46
Interest Expense271.0289.0
Interest Coverage5.835.09


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)1126.831158.1
Div / share0.460.42
EPS2.610.97
Book value / share25.6820.39
Institutional Own % n/a n/a
Avg Daily Volume6627657.06029062.0

Valuation


BUY. DOW CHEMICAL's P/E ratio indicates a significant discount compared to an average of 24.64 for the Chemicals industry and a significant discount compared to the S&P 500 average of 25.30. To use another comparison, its price-to-book ratio of 2.07 indicates a discount versus the S&P 500 average of 2.83 and a significant discount versus the industry average of 5.74. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, DOW CHEMICAL proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
DOW 7.84 Peers 24.64   DOW 8.26 Peers 15.64

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

DOW is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

DOW is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
DOW 13.41 Peers 20.67   DOW NM Peers 1.67

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

DOW is trading at a significant discount to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

DOW's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
DOW 2.07 Peers 5.74   DOW 94.55 Peers 91.83

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

DOW is trading at a significant discount to its peers.

 

Average. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

DOW is expected to keep pace with its peers on the basis of earnings growth.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
DOW 1.30 Peers 2.26   DOW -14.65 Peers -7.46

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

DOW is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

DOW significantly trails its peers on the basis of sales growth

 

 

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