Dow Chemical Co

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DOW : NYSE : Basic Materials
$53.27 | %
Today's Range: 0.00 - 0.00
Avg. Daily Volume: 6,975,700
07/25/16 - 4:02 PM ET

Financial Analysis


DOW CHEMICAL's gross profit margin for the first quarter of its fiscal year 2016 has increased when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. DOW CHEMICAL has average liquidity. Currently, the Quick Ratio is 1.32 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.

During the same period, stockholders' equity ("net worth") has increased by 15.11% 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 Q1 FY16 Q1 FY15
Net Sales ($mil)10703.012370.0
EBITDA ($mil)2188.02204.0
EBIT ($mil)1611.01598.0
Net Income ($mil)254.01478.0


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)6610.06288.0
Total Assets ($mil)68440.067789.0
Total Debt ($mil)16976.019789.0
Equity ($mil)25599.022237.0


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin30.3626.99
EBITDA Margin20.4417.81
Operating Margin15.0512.92
Sales Turnover0.690.83
Return on Assets9.446.19
Return on Equity23.9117.36
Debt Q1 FY16 Q1 FY15
Current Ratio2.01.97
Debt/Capital0.40.47
Interest Expense261.0290.0
Interest Coverage6.175.51


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)1122.831152.88
Div / share0.460.42
EPS0.151.18
Book value / share22.819.29
Institutional Own % n/a n/a
Avg Daily Volume6864262.07174478.0

Valuation


BUY. DOW CHEMICAL's P/E ratio indicates a significant discount compared to an average of 24.44 for the Chemicals industry and a significant discount compared to the S&P 500 average of 25.05. To use another comparison, its price-to-book ratio of 2.30 indicates a discount versus the S&P 500 average of 2.81 and a significant discount versus the industry average of 5.91. 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 10.19 Peers 24.44   DOW 9.24 Peers 15.53

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 13.55 Peers 19.75   DOW NM Peers 2.43

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.

 

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 2.30 Peers 5.91   DOW 58.46 Peers 43.16

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.

 

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

DOW is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
DOW 1.25 Peers 2.18   DOW -15.99 Peers -6.08

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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