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5-Star Stocks Poised to Pop: Dow Chemical

By Brian D. Pacampara, CFA – Updated Apr 5, 2017 at 8:45PM

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Market-trouncing returns could be written in this 5-Star.

Based on the aggregated intelligence of 115,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Dow Chemical (NYSE:DOW) has earned a coveted five-star ranking. Our data has shown that five-star stocks outperform the market by a significant margin; conversely, one-star stocks have woefully lagged the market average.

With that in mind, let's take a closer look at Dow Chemical's business and see what CAPS investors are saying about the stock right now.

Dow Chemical facts

Headquarters (Founded)

Midland, Michigan (1897)

Market Cap

$31.69 billion

Industry

Diversified Chemicals

TTM Revenue

$59.02 billion

Management

CEO Andrew Liveris (since 2004),

CFO Geoffery Merszei (since 2005)

Return on Capital (average last three years)

20.23%

Competitors

DuPont (NYSE:DD),

Monsanto (NYSE:MON)

CAPS members bullish on DOW also bullish on

General Electric (NYSE:GE),

Johnson & Johnson (NYSE:JNJ)

CAPS members bearish on DOW also bearish on

Ford Motor (NYSE:F),

General Motors (NYSE:GM)

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 358 of 375 of the All-Star members who have rated Dow Chemical -- some 95% -- believe the stock will outperform the S&P 500 going forward. These All-Star bulls include choppaz4life and saxonglass, both of whom are ranked in the top 10% of our community.

Last month, choppaz4life noted that Dow Chemical is a "Long term winner with a decent strong dividend. Like it or not chemicals are in and on and make up almost everything we touch on any given day."

In a pitch in February, saxonglass shares that bullish sentiment, highlighting the stock as a rather unnoticed restructuring play:

I'm not sure people realize the fundamental change that has occurred in [Dow Chemical]'s business model. Several joint venture companies have been formed and virtually every one will provide [Dow Chemical] with distinct advantages relative to raw materials and markets. The Saudi JV provides a stable, low cost supply of petro. The JV in Brazil with a stable raw material for many plastic products. [Dow Chemical] should be less cyclical than in the past.

What do you think about Dow Chemical, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 115,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

Dow Chemical and Johnson & Johnson are Motley Fool Income Investor recommendations. Try any of our Foolish newsletters today free for 30 days.

Foolish contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool's disclosure policy always gets a perfect score.

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Stocks Mentioned

DuPont de Nemours, Inc. Stock Quote
DuPont de Nemours, Inc.
DOW
Ford Motor Company Stock Quote
Ford Motor Company
F
$12.31 (-3.60%) $0.46
General Electric Company Stock Quote
General Electric Company
GE
$64.55 (-1.24%) $0.81
General Motors Company Stock Quote
General Motors Company
GM
$35.48 (-5.08%) $-1.90
Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$166.72 (0.33%) $0.54
E. I. du Pont de Nemours and Company Stock Quote
E. I. du Pont de Nemours and Company
DD
Monsanto Company Stock Quote
Monsanto Company
MON

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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