Analyzing Dow Chemical (DOW) and Dow Chemical Company (The) (DWDP)

Dow Chemical (NYSE: DOW) and Dow Chemical Company (The) (NYSE:DWDP) are both large-cap basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, dividends, risk, institutional ownership, profitability and valuation.

Profitability

This table compares Dow Chemical and Dow Chemical Company (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dow Chemical 9.82% 19.01% 6.69%
Dow Chemical Company (The) 5.01% 9.73% 4.18%

Institutional & Insider Ownership

67.8% of Dow Chemical shares are held by institutional investors. Comparatively, 74.8% of Dow Chemical Company (The) shares are held by institutional investors. 0.9% of Dow Chemical shares are held by company insiders. Comparatively, 0.9% of Dow Chemical Company (The) shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Dow Chemical pays an annual dividend of $1.84 per share and has a dividend yield of 2.8%. Dow Chemical Company (The) pays an annual dividend of $1.52 per share and has a dividend yield of 2.2%. Dow Chemical pays out 77.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Dow Chemical Company (The) pays out 73.1% of its earnings in the form of a dividend. Dow Chemical Company (The) has increased its dividend for 6 consecutive years.

Risk and Volatility

Dow Chemical has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500. Comparatively, Dow Chemical Company (The) has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500.

Valuation & Earnings

This table compares Dow Chemical and Dow Chemical Company (The)’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Dow Chemical N/A N/A N/A $2.39 27.89
Dow Chemical Company (The) $48.16 billion 3.43 $4.32 billion $2.08 33.94

Dow Chemical Company (The) has higher revenue and earnings than Dow Chemical. Dow Chemical is trading at a lower price-to-earnings ratio than Dow Chemical Company (The), indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations for Dow Chemical and Dow Chemical Company (The), as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dow Chemical 0 3 6 0 2.67
Dow Chemical Company (The) 1 3 16 0 2.75

Dow Chemical presently has a consensus price target of $72.14, indicating a potential upside of 8.24%. Dow Chemical Company (The) has a consensus price target of $79.41, indicating a potential upside of 12.48%. Given Dow Chemical Company (The)’s stronger consensus rating and higher possible upside, analysts plainly believe Dow Chemical Company (The) is more favorable than Dow Chemical.

Summary

Dow Chemical Company (The) beats Dow Chemical on 8 of the 13 factors compared between the two stocks.

Dow Chemical Company Profile

The Dow Chemical Company manufactures and supplies products used primarily as raw materials in the manufacture of customer products and services. The Company’s segments include Agricultural Sciences, which is engaged in providing crop protection and seed/plant biotechnology products and technologies, urban pest management solutions and healthy oils; Consumer Solutions, which consists of Consumer Care, Dow Automotive Systems, Dow Electronic Materials and Consumer Solutions-Silicones businesses; Infrastructure Solutions, which consists of Dow Building & Construction, Dow Coating Materials, Energy & Water Solutions, Performance Monomers and Infrastructure Solutions-Silicones businesses; Performance Materials & Chemicals, which consists of Chlor-Alkali and Vinyl, Industrial Solutions and Polyurethanes businesses, and Performance Plastics, which consists of Dow Elastomers, Dow Electrical and Telecommunications, Dow Packaging and Specialty Plastics, Energy and Hydrocarbons businesses.

Dow Chemical Company (The) Company Profile

DowDuPont Inc. is a holding company formed through the merger of equals between The Dow Chemical Company and E. I. du Pont de Nemours and Company (DuPont). The Company’s business divisions include Agriculture division, Material Science division, and a Specialty Products division. The Agriculture Division offers a complete portfolio of products and technologies, traits and crop protection. The Materials Science Division provides solutions, such as packaging, transportation, infrastructure and customer care. The Specialty Products division provides solution for industrial, safety, energy, food, nutrition, construction, electronics and consumer goods industries. The company provides solutions to a range of markets, including aerospace, automotive, consumer electronics, military, printing, renewable energy, semiconductors, child nutrition, dietary supplements, carpet and apparel, fertilizer, and oil and gas/energy.

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