Stocks to Buy: 5 Reasons Value Investors Should Consider Dow

Chemical Today

Image source: Dow Chemical

Diversity: Helps reduce earnings volatility1

Diverse businesses

Performance plastics Performance materials

& chemicals Infrastructure solutions Consumer solutions Agricultural sciences

Dow operates five business segments:

Source: Company website

Diverse end markets Dow’s broad product portfolio serves several

key industries across 180 countries

Source: Company website

Innovative leadership: A compelling competitive advantage2

Full steam ahead

Dow demonstrated its innovative leadership last year, with

More than 5,000 new product launches 635 new U.S. patents – a record for the company

Solid foundation for the future

Dow’s patent-advantaged sales are growing rapidly – they now make up nearly a quarter of its total revenue

Source: Company website

Strong operational performance and financials3

Growing profitsDow’s net profit has more than doubled on flat revenue during the past five years

Rapidly rising EBITDA*

*EBITDA = Earnings before interest, tax, depreciation, and amortization. Figures on a trailing 12-month basis. Chart source: Dow Q2 2015 earnings presentation.

How is Dow pulling it off?

Through a threefold strategy Increased focus on high-margin value-added

productsTarget investments to exploit lower feedstock (crude

oil, natural gas) costsDivesting non-core operations to drive down costs

Strong financials

Key stats as of June 30, 2015Cash and cash equivalents: $6.2 billionLong-term debt: $17.8 billionInterest coverage ratio: 7.9Free cash flow (TTM*): $3.2 billion

*TTM = Trailing twelve months

Point to noteDow’s cash flows have grown while debt has

declined during the past five years

Big-ticket growth plans = solid foundation for the future4

Investing for growth Major growth projects underway: Potential to

add more than $3 billion in annual EBITDA

Source: Dow Chemical 2014 Annual Report

Investing for growth

Key projects includeSadara: Dow-Saudi Aramco joint venture to build the world’s largest petrochemical facilityNew ethylene, propylene production plants in Texas

Impressive shareholder returns5

Value for shareholdersDow demonstrated its commitment to shareholders in 2014, when it

Increased its dividend twiceExpanded its share repurchase program to $9.5 billion from $4.5 billion

Growing dividends

Dow’s dividend has grown at a compounded rate of 19% since 2009

Source: Dow Chemical 2014 Annual Report

Higher buybacksShare buybacks have ramped up, too

Source: Dow Chemical 2014 Annual Report

To sum up

Dow Chemical measures up on key counts: operational performance, financials, growth catalysts, and shareholder returns. So any dip in its

share price could present an opportunity for value investors.

This Could Be The Next Billion-Dollar iSecret