August 15, 2024
Top 10 Stock Dow Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Dow – Top 10 Stock in Employee Satisfaction Leaders in the United States
Dow is listed as a top 10 stock on August 15, 2024 in the market index Employee Focus US because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment from a financial fact perspective where only investor sentiment is a reason for caution. Based on the Obermatt 360° View of 58 (high 58% performer), Obermatt assesses an overall buy recommendation for Dow on August 15, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Commodity Chemicals |
| Index | Low Emissions, Dividends USA, Employee Focus US, Diversity USA, Human Rights, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Dow Buy
| 360 METRICS | August 15, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 73 |
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| GROWTH | ||||||||
| GROWTH | 69 |
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| SAFETY | ||||||||
| SAFETY | 54 |
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| SENTIMENT | ||||||||
| SENTIMENT | 12 |
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| 360° VIEW | ||||||||
| 360° VIEW | 58 |
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ANALYSIS: With an Obermatt 360° View of 58 (better than 58% compared with alternatives), overall professional sentiment and financial characteristics for the stock Dow are above average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators above average for Dow. The consolidated Value Rank has an attractive rank of 73, which means that the share price of Dow is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 73% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 69, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. The company is also safely financed with a Safety Rank of 54. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of only 12. Professional investors are more confident in 88% other stocks. ...read more
RECOMMENDATION: With a consolidated 360° View of 58, Dow is better positioned than 58% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 73), above-average growth (Growth Rank of 69), and safe financing practices (Safety Rank of 54), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the professional market sentiment is on the riskier side (Sentiment Rank of 12), but that could also mean an overreaction to negative news in the past. Good value is sometimes an indication that the company's future is challenging. If they have been enjoying above average growth and are still a good value, this may not continue. We recommend evaluating whether the future of Dow is as challenging as the low price of the stock despite good growth and safe financing practices suggest. Since the professional community is pessimistic, you may want to reflect these negative opinions in light of what you find reasonable to expect for the future. If you believe this pessimistic view is transitory, you have a solid investment case based on current financial factors. ...read more
Sentiment Strategy: Professional Market Sentiment for Dow negative
ANALYSIS: With an Obermatt Sentiment Rank of 12 (better than 12% compared with alternatives), overall professional sentiment and engagement for the stock Dow is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and half above average for Dow. Analyst Opinions are at a rank of 7 (worse than 93% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 7, which means that stock research experts are getting even more pessimistic. In addition, the Professional Investors rank is 37, which means that professional investors hold less stock in this company than in 63% of alternative investment opportunities. Pros tend to invest in other companies. The only positive sentiment indicator for Dow is Market Pulse, with a rank of 50, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 50% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 12 (less encouraging than 88% compared with investment alternatives), Dow has a reputation among professional investors that is far below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Dow Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 73 (better than 73% compared with alternatives), Dow shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Dow. Price-to-Sales (P/S) is 69, which means that the stock price compared with what market professionals expect for future sales is lower than for 69% of comparable companies, indicating a good value concerning Dow's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 96, which means that dividends are expected to be higher than for 96% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 51% of alternatives (only 49% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 53% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 73, is a buy recommendation based on Dow's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. ...read more
Growth Strategy: Dow Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 69 (better than 69% compared with alternatives), Dow shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Dow. Sales Growth has a value of 53 which means that currently professionals expect the company to grow more than 53% of its competitors. Profit Growth with a value of 73 and Capital Growth with a rank of 78 means that currently, professionals expect the company to grow both profits and invested capital more than of its competitors. But Stock Returns has only a rank of 43, which means that stock returns have recently been below 57% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 69, is a buy recommendation for growth and momentum investors. Dow has only one below-average growth indicator, the stock returns. This is probably the least reliable growth indicator, because it measures company and investor expectations at the same time. The three other growth indicators, which are all positive for Dow, are more reliable measures of growth momentum. For this reason, the company seems to be on a good trajectory, unless you think the current period is not representative, because of unique events that will not be repeated in the future. ...read more
Safety Strategy: Dow Debt Financing Safety above-average
| SAFETY METRICS | August 15, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 50 |
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| REFINANCING | ||||||||
| REFINANCING | 70 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 41 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 54 |
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ANALYSIS: With an Obermatt Safety Rank of 54 (better than 54% compared with alternatives), the company Dow has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Dow is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators where two out of three are above average for Dow.Leverage is at 50, meaning the company has a below-average debt-to-equity ratio. It has less debt than 50% of its competitors.Refinancing is at a rank of 70, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 70% of its competitors. Liquidity is at 41, meaning that the company generates less profit to service its debt than 59% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 54 (better than 54% compared with alternatives), Dow has a financing structure that is safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. ...read more
Combined financial peformance: Dow Top Financial Performance
| COMBINED PERFORMANCE | August 15, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 73 |
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| GROWTH | ||||||||
| GROWTH | 69 |
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| SAFETY | ||||||||
| SAFETY | 41 |
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| COMBINED | ||||||||
| COMBINED | 85 |
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ANALYSIS: With an Obermatt Combined Rank of 85 (better than 85% compared with investment alternatives), Dow (Commodity Chemicals, USA) shares have much better financial characteristics than comparable stocks. Shares of Dow are a good value (attractively priced) with a consolidated Value Rank of 73 (better than 73% of alternatives), show above-average growth (Growth Rank of 69), and are safely financed (Safety Rank of 54), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 85, is a strong buy recommendation based on Dow's financial characteristics. As the company Dow's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 73), above-average growth (Obermatt Growth Rank of 69), and indicate that the company is safely financed (Obermatt Safety Rank of 54), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Dow. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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