Should You Buy Dow Inc (DOW) Stock Tuesday?

Tuesday, January 25, 2022 02:21 PM | InvestorsObserver Analysts

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Dow Inc (DOW) receives a weak valuation score of 22 from InvestorsObserver analysis. Our proprietary scoring system considers the overall health of the company by looking at the stock's price, earnings, and growth rate to determine if it represents a good value. DOW holds a better value than 22% of stocks at its current price. Investors who are focused on long-term growth through buy-and-hold investing will find the Valuation Rank especially relevant when allocating their assets.

DOW gets a 22 Valuation Rank today. Find out what this means to you and get the rest of the rankings on DOW!
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Metrics Analysis

DOW has a trailing twelve month Price to Earnings (PE) ratio of 7.3. The historical average of roughly 15 shows a good value for DOW stock as investors are paying lower share prices relative to the company's earnings. DOW's low trailing PE ratio shows that the firm has been trading below its fair market value recently. Its trailing 12-month earnings per share (EPS) of 7.72 more than justifies the stock's current price. However, trailing PE ratios do not factor in the company's projected growth rate, resulting in many newer firms having high PE ratios due to high growth potential enticing investors despite inadequate earnings. DOW's 12-month-forward PE to Growth (PEG) ratio of 0.29 is considered a good value as the market is undervaluing DOW in relation to the company's projected earnings growth. DOW's PEG comes from its forward price to earnings ratio being divided by its growth rate. A PEG ratio of 1 represents a perfect correlation between earnings growth and share price. Due to their incorporation of more fundamentals of a company's overall health and focusing on the future rather than the past, PEG ratios are one of the most used valuation metrics by analysts today.

Summary

DOW's valuation metrics are strong at its current price due to a undervalued PEG ratio despite strong growth. DOW's PE and PEG are better than the market average resulting in a above average valuation score. Click Here to get the full Report on Dow Inc (DOW) stock.

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