Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, chemical giant Dow Chemical (NYSE: DOW ) earned a respected four-star ranking.
With that in mind, let's take a closer look at Dow's business and see what CAPS investors are saying about the stock right now.
Dow facts
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Headquarters (founded)
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Midland, Mich. (1897)
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Market Cap
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$30 billion
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Industry
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Diversified chemicals
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Trailing-12-Month Revenue
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$51.55 billion
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Management
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CEO Andrew Liveris
CFO William Weideman
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Return on Equity (average, past 3 years)
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5.5%
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Cash/Debt
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$2.97 billion / $21.44 billion
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Dividend Yield
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2.3%
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Competitors
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DuPont (NYSE: DD )
Monsanto (NYSE: MON )
PPG Industries (NYSE: PPG )
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Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 94% of the 2,166 members who have rated Dow believe the stock will outperform the S&P 500 going forward. These bulls include kenjotto and All-Star coryjobe, who is ranked in the top 15% of our community.
Earlier this week , kenjotto updated Fools on the progress Dow seems to be making:
Successfully digesting Rohm & Haas, and paying down its debt. The focus on higher end materials should drive revenues and margins higher. It's not out of the woods yet, but has done a good job considering the economic environment it had to operate in.
Thanks to massive cost-cutting, asset sales, and rebounding demand, Dow looks to be slowly recovering from its leverage-induced, near-death experience in early 2009. Most recently, Dow generated more than $600 million in cash from its sale of Styron and reduced its debt load by $1.9 billion. In fact, Dow has now divested more than $5 billion in nonstrategic assets over the past two years. While an economic double dip could severely stunt Dow's turnaround progress, recent results out of fellow chemical players indicate that demand across almost all product categories should continue to improve. And with the stock trading at a forward P/E discount to a few of its fiercest foes such as DuPont, Monsanto, and PPG, Dow seems like a relatively cheap way to take advantage of those tailwinds.
CAPS All-Star coryjobe elaborates:
They should continue to benefit from a better demand climate in the future. They have shown good growth in emerging countries which should continue to help sales. This demand should come from China, India, and Brazil. The recent improvement in the north America and European markets suggest that the markets are starting to improve. Recently sold their Styron Division. ... This will help them reduce their leverage and strengthen the balance sheet.
What do you think about Dow, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
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