Dow Chemical Co (DOW): Today's Featured Chemicals Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Dow Chemical ( DOW) pushed the Chemicals industry lower today making it today's featured Chemicals laggard. The industry as a whole closed the day down 1%. By the end of trading, Dow Chemical fell 32 cents (-1.1%) to $28.08 on average volume. Throughout the day, 9.8 million shares of Dow Chemical exchanged hands as compared to its average daily volume of 9.6 million shares. The stock ranged in price between $28.03-$28.41 after having opened the day at $28.40 as compared to the previous trading day's close of $28.40. Other companies within the Chemicals industry that declined today were: Ferro ( FOE), down 24.2%, Lizhan Environmental ( LZEN), down 18.9%, BioFuel Energy Corporation ( BIOF), down 4.7%, and Pacific Ethanol ( PEIX), down 4.3%.
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The Dow Chemical Company manufactures and supplies chemical products used as raw materials in the manufacture of customer products and services worldwide. Dow Chemical has a market cap of $34.75 billion and is part of the conglomerates sector. The company has a P/E ratio of 18.4, below the average conglomerates industry P/E ratio of 18.5 and above the S&P 500 P/E ratio of 17.7. Shares are down 1.3% year to date as of the close of trading on Tuesday. Currently there are three analysts that rate Dow Chemical a buy, three analysts rate it a sell, and 12 rate it a hold.

TheStreet Ratings rates Dow Chemical as a buy. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the chemicals industry could consider Materials Select Sector SPDR ( XLB) while those bearish on the chemicals industry could consider ProShares Short Basic Materials Fd ( SBM).

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