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Is Dow Inc. (DOW) Stock Undervalued Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Dow Inc. (DOW - Free Report) is a stock many investors are watching right now. DOW is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 8.67, while its industry has an average P/E of 12.42. Over the past 52 weeks, DOW's Forward P/E has been as high as 29.56 and as low as 8.66, with a median of 18.18.

Investors will also notice that DOW has a PEG ratio of 0.32. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. DOW's industry has an average PEG of 0.57 right now. Over the last 12 months, DOW's PEG has been as high as 8.89 and as low as 0.32, with a median of 4.16.

Finally, we should also recognize that DOW has a P/CF ratio of 6.55. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. DOW's P/CF compares to its industry's average P/CF of 11.01. Over the past 52 weeks, DOW's P/CF has been as high as 81.12 and as low as 6.20, with a median of 11.12.

These are just a handful of the figures considered in Dow Inc.'s great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that DOW is an impressive value stock right now.


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