DOW Stock Too Low to Ignore?
It is so easy to say, “buy low, sell high.” However, very few investors actually have the stomach to buy when a stock is out of favor. In the stock markets, price and value don’t always move together, and you also get a lot of noise in the midst of it. Income investors must learn to spot opportunities when they are low, and then act quickly.
Dow Inc (NYSE:DOW) might be a prime example of a “buy low” opportunity. Obviously, this is not a recommendation to buy, but for income investors, DOW stock could be worth a serious look.
Year to date, Dow Inc stock has fallen close to 26%. There’s a lot of pessimism towards the stock. The vast majority of Wall Street analysts are giving it a “hold” rating, so they’re not expecting much. But DOW could offer not just robust income, but also massive capital appreciation.
What Does Dow Inc Do?
Headquartered in Midland, Michigan, Dow is one of the biggest names in the materials science industry. The company produces essential chemicals and plastics used in everything from packaging and infrastructure to mobility and consumer applications in the U.S., Canada, Europe, the Middle East, Africa, India, Asia-Pacific, and Latin America.
Dow Inc operates through three business segments: Packaging & Specialty Plastics; Industrial Intermediates & Infrastructure; and Performance Materials & Coatings.
The Packaging & Specialty Plastics segment of Dow supplies materials used in food packaging, consumer goods, and industrial applications. Its offerings include ethylene, propylene, polyethylene, aromatic products, ethylene derivatives, and ethylene propylene diene monomer rubber.
The Industrial Intermediates & Infrastructure segment of the company offers chemicals used in the construction, automotive, and energy industries, such as polyurethanes, aromatic isocyanates, fully formulated polyurethane systems, chlor-alkali, vinyl, construction chemicals consisting of cellulose ethers, redispersible latex powders, acrylic emulsions, coatings, adhesives, sealants, elastomers, and composites.
The Performance Materials & Coatings segment of Dow provides materials for paints, coatings, and silicones. It also engages in the property and casualty insurance and reinsurance businesses. (Source: “Profile,” Yahoo! Finance, last accessed June 6, 2025.)
Don’t Ignore What’s Happening on the Stock Chart…
After plunging from the $55.00 range to the high $20.00 range, Dow Inc stock now looks like it’s entering a period of some stabilization…one could even call it base-building. This is a good thing for income investors.
The Dow Inc stock price has been consolidating in a tight range between roughly $27.00 and $30.00 for the past couple of months. This kind of price action generally suggests that sellers are exhausted and running low on energy.
It’s also interesting to note that, as there’s some base-building on Dow Inc stock, volume has remained elevated. At its core, this indicates that there’s some accumulation happening, potentially by institutional buyers as well.
Beyond all of this, take a look at the moving average convergence-divergence (MACD) momentum indicator. The MACD remains in negative territory, but it’s starting to flatten. This doesn’t scream “buy,” but it does suggest that the worst of the selling pressure could be behind us.
All in all, technical analysis suggests that the outlook for Dow Inc stock is bullish.
Chart Courtesy of StockCharts.com
The Dividends Keep on Coming
Income investors shouldn’t overlook one thing: Dow isn’t just another cyclical name going through a rough patch at the moment. Beneath the surface, there’s still a solid, cash-generating business.
Dow Inc stock seems to be in horrible shape, but the dividends haven’t disappeared. The company’s management is disciplined, focused on streamlining operations, and committed to rewarding shareholders.
At the current price, Dow Inc stock has a dividend yield of 9.8%, or pays $2.80 on annual basis. So, for every 100 shares invested, DOW shareholders could generate annual income of $280.00.
Mind you, the dividend yield offered by Dow Inc stock is several times higher than what you’d get holding on to the S&P 500. It is a constituent of the index, too. Very few companies in the index are offering yields like DOW stock.
Bottom line: Dow Inc stock isn’t making headlines at the moment, but it is doing what income investors want—paying shareholders to hold the stock.
The Lowdown on Dow Inc Stock
This isn’t the first time that Dow Inc stock is being discussed in Income Investors; it has been profiled here a few times. To say the least, the stock is trading at a level that’s too low to ignore, and the dividend yield offered by Dow Inc stock is hard to find in a blue-chip stock these days.
The DOW chart suggests that there’s base building and the price could be setting up for a bounce.
Moreover, like clockwork, the dividends keep on coming with Dow Inc stock. At the current price, it has a dividend close to 10%. That’s hard to find in blue-chip companies these days.
Don’t forget: there’s a solid business in place here. Sure, Dow is facing some headwinds, but once uncertainty in the global economy eases, its financials will get better. After all, this company is led by a very capable management team.
Lastly, Dow Inc stock is still loved by institutional investors. Close to 68% of all outstanding shares are owned by institutional investors. The Vanguard Group, Inc., BlackRock Inc, and State Street Corp are the biggest institutional owners of DOW stock.