Dow Inc. (NYSE: DOW)

Sector: Basic Materials Industry: Chemicals CIK: 0001751788
Market Cap 22.27 Bn
P/B 1.39
P/E -8.49
P/S 0.56
ROIC (Qtr) -4.09
Div Yield % 6.68
Rev 1y % (Qtr) -9.08
Total Debt (Qtr) 19.60 Bn
Debt/Equity (Qtr) 1.22
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About

Dow Inc., a leading materials science company (NYSE: DOW), operates in high-growth markets such as packaging, infrastructure, mobility, and consumer applications. Established in 2018, the company has its headquarters in Midland, Michigan, and serves as a holding company for The Dow Chemical Company and its consolidated subsidiaries. Dow Inc. is engaged in various business activities that revolve around the production and distribution of a wide range of products. The company's operations are divided into three major segments: Packaging & Specialty...

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Investment thesis

Bull case

  • Healthy cash reserves of 3.82B provide 5.85x coverage of short-term debt 652M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 49.07B provides 2.50x coverage of total debt 19.60B, indicating robust asset backing and low credit risk.
  • Tangible assets of 49.07B provide robust 11.20x coverage of other current liabilities 4.38B, indicating strong asset backing.
  • Robust tangible asset base of 49.07B provides 5.53x coverage of working capital 8.88B, indicating strong operational backing.
  • Cash position of 3.82B provides exceptional 21.32x coverage of minority interest expenses 179M, indicating strong liquidity.

Bear case

  • Operating cash flow of 1.03B barely covers its investment activities of (2.13B), with a coverage ratio of -0.49, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 1.03B provides thin coverage of dividend payments of (1.49B) with a -0.69 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of (2.13B) provide weak support for R&D spending of 752M, which is -2.83x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Free cash flow of (1.64B) provides weak coverage of capital expenditures of 2.68B, with a -0.61 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of (1.82B) show weak coverage of depreciation charges of 2.83B, with a -0.64 ratio indicating high capital intensity and potential reinvestment needs.

Segments Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Chemicals
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 DOW Dow Inc. 22.27 Bn -8.49 0.56 19.60 Bn
2 CE Celanese Corp 6.07 Bn 3.05 0.57 13.13 Bn
3 MEOH Methanex Corp 4.41 Bn 45.97 2.24 3.64 Bn
4 OLN OLIN Corp 3.95 Bn 50.79 0.65 3.30 Bn
5 HUN Huntsman CORP 2.92 Bn 8.95 0.39 2.40 Bn
6 REX REX AMERICAN RESOURCES Corp 1.12 Bn 22.21 1.72 0.02 Bn
7 TROX Tronox Holdings plc 1.06 Bn -9.74 0.40 3.46 Bn
8 GPRE Green Plains Inc. 0.89 Bn -7.32 0.42 0.57 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.64 0.76
EV to Cash from Ops. EV/CFO 36.13 10.63
EV to Debt EV to Debt 1.90 4.16
EV to EBIT EV/EBIT -20.43 -392.22
EV to EBITDA EV/EBITDA 29.22 11.31
EV to Free Cash Flow [EV/FCF] EV/FCF -22.68 18.26
EV to Market Cap EV to Market Cap 1.67 1.76
EV to Revenue EV/Rev 0.93 4.23
Price to Book Value [P/B] P/B 1.39 1.69
Price to Earnings [P/E] P/E -8.49 -53.47
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -1.76 -12.67
Dividend Payout Ratio % Div Payout % (Qtr) -56.80 17.68
Dividend per Basic Share Div per Share (Qtr) 2.10 0.50
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -90.91 1,007.72
Interest Coverage Int. cover (Qtr) -2.11 -82.93
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 14.86 22.09
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 74.33 4.03
Dividend Growth (1y) % Div 1y % (Qtr) -25.00 -8.48
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -203.86 -121.97
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -75.03 -25.84
EBIT Growth (1y) % EBIT 1y % (Qtr) -178.46 -147.36
EBT Growth (1y) % EBT 1y % (Qtr) -277.56 -143.26
EPS Growth (1y) % EPS 1y % (Qtr) -335.67 -108.77
FCF Growth (1y) % FCF 1y % (Qtr) -617.90 -91.55
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -45.01 0.31
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.68 0.63
Cash Payout Ratio Cash Payout (Qtr) 0.40 0.07
Cash Ratio Cash Ratio (Qtr) 0.42 1.02
Current Ratio Curr Ratio (Qtr) 1.97 2.84
Debt to Equity Ratio Debt/Equity (Qtr) 1.22 1.19
Interest Cover Ratio Int Coverage (Qtr) -2.11 -82.93
Times Interest Earned Times Interest Earned (Qtr) -2.11 -82.93
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 2.50 -96.08
EBIT Margin % EBIT Margin % (Qtr) -4.57 -110.82
EBT Margin % EBT Margin % (Qtr) -6.73 -114.07
Gross Margin % Gross Margin % (Qtr) 6.30 10.84
Net Profit Margin % Net Margin % (Qtr) -6.60 -117.97