Dow Chemical Co

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DOW : NYSE : Basic Materials
$63.83 | %
Today's Range: 0.0 - 0.0
Avg. Daily Volume: 6023700.0
03/23/17 - 4:01 PM ET

Financial Analysis


DOW CHEMICAL's gross profit margin for the fourth quarter of its fiscal year 2016 has decreased when compared to the same period a year ago. Even though sales increased, the net income has decreased. DOW CHEMICAL has average liquidity. Currently, the Quick Ratio is 1.24 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 2.41% 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 Q4 FY16 Q4 FY15
Net Sales ($mil)13020.011462.0
EBITDA ($mil)2003.02103.0
EBIT ($mil)1238.01536.0
Net Income ($mil)52.03612.0


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)6607.08577.0
Total Assets ($mil)79511.068026.0
Total Debt ($mil)21363.017210.0
Equity ($mil)25987.025374.0


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin24.6528.17
EBITDA Margin15.3818.34
Operating Margin9.5113.4
Sales Turnover0.610.72
Return on Assets5.4311.29
Return on Equity15.328.94
Debt Q4 FY16 Q4 FY15
Current Ratio1.882.18
Debt/Capital0.450.4
Interest Expense289.0292.0
Interest Coverage4.285.26


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)1211.131116.94
Div / share0.460.46
EPS-0.032.94
Book value / share21.4622.72
Institutional Own % n/a n/a
Avg Daily Volume5745327.07042850.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 39.28 for the Chemicals industry and a discount compared to the S&P 500 average of 26.73. To use another comparison, its price-to-book ratio of 2.98 indicates valuation on par with the S&P 500 average of 2.98 and a significant discount versus the industry average of 6.22. The price-to-sales ratio is below the S&P 500 average and is well below 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 19.01 Peers 39.28   DOW 14.12 Peers 16.00

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 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 14.85 Peers 20.59   DOW 1.27 Peers 1.86

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 discount to its peers.

 

Discount. 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 trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
DOW 2.98 Peers 6.22   DOW -45.64 Peers -9.06

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.

 

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

However, DOW is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
DOW 1.61 Peers 2.38   DOW -1.28 Peers -1.60

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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