Is Dow Inc. (DOW) Stock Undervalued Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Neverthe...
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Dow Inc. (DOW) is a stock many investors are watching right now. DOW is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 8.96 right now. For comparison, its industry sports an average P/E of 12.17. Over the last 12 months, DOW's Forward P/E has been as high as 29.56 and as low as 8.66, with a median of 17.43.
We also note that DOW holds a PEG ratio of 0.33. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. DOW's industry currently sports an average PEG of 0.56. Over the last 12 months, DOW's PEG has been as high as 8.89 and as low as 0.32, with a median of 4.05.
Finally, we should also recognize that DOW has a P/CF ratio of 6.66. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. DOW's current P/CF looks attractive when compared to its industry's average P/CF of 10.77. DOW's P/CF has been as high as 81.12 and as low as 6.20, with a median of 10.77, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Dow Inc. Is likely undervalued currently. And when considering the strength of its earnings outlook, DOW sticks out at as one of the market's strongest value stocks.
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Dow Inc. (DOW): Free Stock Analysis Report
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