Dow is a leading science and technology company that provides
innovative chemical, plastic and agricultural products and
services to many essential consumer markets. With annual sales
of $30 billion, Dow serves customers in more than 170 countries
and a wide range of markets that are vital to human progress,
including food, transportation, health and medicine, personal
and home care, and building and construction, among others.
Committed to the principles of Sustainable Development, Dow and
its approximately 50,000 employees seek to balance economic,
environmental and social responsibilities.
Dow people around the world develop solutions for society based
on Dow's inherent strength in science and technology. For over a
decade, we have embraced and advocated Responsible CareŽ - a
voluntary industry-wide commitment to safely handle our chemicals
from inception in the laboratory to ultimate disposal. This
worldwide commitment helps consumers lead better lives, customers
succeed, stockholders prosper, employees achieve and communities
(Source: Dow Chemical)
Reasons To Invest
***Aggressive Investors Only***
Care for controversy? Here's a bit.
Among many others, Dow Chemical has been knocked down big in
recent weeks over fears of asbestos litigation. Dow recently
settled a case in Texas against Union Carbide, a company that
Dow acquired last year. The terms of the settlement were not
disclosed, but Dow said that the agreement was within the
parameters of past settlements against Union Carbide.
Further fear entered the equation following the settlement as
investors discounted future settlements against Dow Chemical.
Several analysts exacerbated the fears by downgrading shares of
the company. For instance, UBS Warbug reduced its rating on
the stock from a strong buy to a hold, citing future asbestos
Dow has kept quiet about its asbestos exposure. For its
failure to address the asbestos risks, fear has run rampant
in its shares. And fear is the most powerful emotion in the
market. If there were a material change to Dow's financial
position, the company would have to disclose as much through a
There are two points of view concerning Dow's hush-hush stance.
First, the company doesn't perceive the asbestos litigation as
a risk. Second, the company does not yet know how much exposure
it has to asbestos litigation. Judging by the company's
informal comments surrounding the recent Texas ruling, the most
likely scenario is the former. But that's only speculation. If
the company does file with the SEC, disclosing its exposure to
asbestos litigation, it could knock down the stock more depending
on the severity of the news.
Why, then, are we interested in Dow Chemical? Good question.
There appears to be more psychology at play in shares of Dow
currently than actual economics. The economy is turning around.
Never mind by how much. The rebound in the economy, however small
or larger, will positively benefit Dow's operations. Furthermore,
the low price of energy should continue to help Dow's earnings
along as the company is highly levered to the cost of energy.
Should the fears (Read: A return to rationality) subside, Dow
should bounce back in a big way, which makes its shares attractive
at current valuations. Finally, it seems far-fetched to believe
that the government would allow Dow Chemical, and so many other
large U.S. corporations, to fall into insolvency because of
asbestos litigation. Government intervention is not out of the
However, this is an aggressive play. A proper risk management
strategy, such as a protective put, should be considered for
mitigating downside risks.
Shares to Qualify = 1 Accept Foreign Accounts: Yes
Auto-reinvestment = No Temper Enrollment Serv: Yes
Min/Max Investment = $25 to $25,000/year
Reinvestment Fees: 0 Cash: 0 Auto ReInvest: 0
Industry Group: Chemicals 52-week high=$39.67
Annual Dividend Per Share= 1.16 52-week low =$25.06
Last earnings 10/20 est = 0.16 actual = 0.16
Next earnings 01-31 est = 0.05 versus = 0.36
P/E = 26
Strong Buy = 4
Moderate Buy = 4
Hold = 4
Moderate Sell = 0
Strong Sell = 0