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Dow Chemical Company logo

News

Nomura Securities Starts Dow Chemical at Buy: What It Means for Mutual Fund Investors (DOW)

Shauna O'Brien Dec 16, 2014



Inside the Analyst Move


According to analyst Aleksey Yefremov: "We see several reasons to own DOW: (1) earnings growth should accelerate above “normal” levels as Dow begins to harvest major capital investments in 2H15; (2) DOW’s portfolio is improving as it sheds ~$8bn-plus in commodity and non-core assets; (3) capex to decline after a 2015 peak, aiding ongoing share buybacks under a $6.1bn authorization (~11% of market cap). (4) In addition to projects, we see 3–6% growth in Dow’s “base” business of making chemicals for end markets, ranging from industrial and construction to ag and electronics."


Analyst Move May Be Too Ambitious


DOW does have a great dividend yield for income-focused investors; however, many chemical companies have been known to cut their dividends.


Mutual Funds to Watch



The Bottom Line


Shares of DOW have been flat YTD.

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