DOW Stock: 1,777 Institutional Investors Own This 9.63%-Yielding Stock
April 30, 2025
Drop in Dow Stock Creates a Great Opportunity
What if I told you there’s a stock out there that’s trading roughly 50% below its all-time high, has a rock-solid business model that’s here to stay, pays a juicy dividend, and, get this, has a financial outlook that’s turning rosy. Would you look at it?
Income investors seeking stocks that can provide income and also have upside potential, then don’t ignore Dow Inc (NYSE:DOW).
Dow is a leader in the industry in which it operates, has a solid business in place, and offers a dividend yield that’s close to 10%. It truly is a rare find in this market.
DOW stock has certainly taken a beating when investors ditched industrial and cyclical stocks, but they missed one big thing in their panic: Dow Inc didn’t stop operating. The company still exists; of course there are headwinds, but it’s nothing major like you’d assume it was just looking at the performance of DOW stock.
What Does Dow 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 April 23, 2025.)
Dow’s Financial Performance…Is it Bad?
If you just look at the performance of DOW stock and nothing else, the first thing you’d wonder about would be whether the company’s financial performance is severely bruised.
But it certainly isn’t.
Based on what Wall Street analysts are saying, at most, Dow is expected to experience a minor hiccup in 2025, but then things should get better in 2025.
Consider this: in 2025, Wall Street analysts are projecting a sales decline of just 0.63% and earnings per share (EPS) of $1.40.
In 2026, Dow Inc is expected to report sales growth of 4.03% and EPS of $2.06. (Source: “Analysis,” Yahoo! Finance, last accessed April 23, 2025.)
Mind you, analysts have lowered their sales and earnings estimates over the past few months. Even with revisions, there’s still growth ahead for Dow, so DOW stock falling close to 50% from its peaks seems like an overreaction.
DOW Stock’s Dividend Here to Stay
Dear reader, DOW stock’s price action certainly doesn’t make a very compelling argument for owning this stock, but it’s important to understand that this is a quality dividend-paying stock that’s not in favor at the moment.
At the current price, DOW stock has a dividend yield of 9.63%, paying $2.80 per share on an annual basis.
That’s not a typo.
Dow Inc has also consistently prioritized its shareholders. It generally pays out 70% to 80% of its free cash flow to DOW stock investors through dividends and buybacks.
Like clockwork, investors get $0.70 per share each quarter.
If business were to get better, it wouldn’t be an out-of-the world idea to see Dow’s dividend increase, too.
Chart courtesy of StockCharts.com
The Lowdown on DOW Stock
DOW stock is down, but it’s not out.
The stock price makes it seem like the worst-case scenario is at play here, and the company is doing poorly. The reality is that this is far from what’s happening.
Dow is expected to see a slight decline in revenue in 2025, but there’s growth in 2026. In the midst of all this, the company is expected to remain profitable.
Also, it’s worth knowing that Dow is firmly committed to its shareholders. Since it started trading on the stock market, DOW stock has paid a dividend of $0.70 per share like clockwork.
Lastly, institutional investors really love DOW stock. As per the most recent data, 1,777 institutions own close to 68% of all outstanding shares. (Source: “Holders,” Yahoo! Finance, last accessed April 23, 2025.)
Because institutional holders tend to remain investors for a long time, high institutional ownership can provide support for DOW stock.
