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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Dow Inc. (DOW - Free Report) . DOW is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 8.89, which compares to its industry's average of 12. Over the past year, DOW's Forward P/E has been as high as 29 and as low as 8.66, with a median of 17.03.

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 PEG compares to its industry's average PEG of 0.55. Over the last 12 months, DOW's PEG has been as high as 8.72 and as low as 0.32, with a median of 0.90.

Finally, investors should note that DOW has a P/CF ratio of 6.51. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. DOW's current P/CF looks attractive when compared to its industry's average P/CF of 10.61. Within the past 12 months, DOW's P/CF has been as high as 81.12 and as low as 6.20, with a median of 10.65.

Value investors will likely look at more than just these metrics, but the above data helps show that Dow Inc. Is likely undervalued currently. And when considering the strength of its earnings outlook, DOW sticks out at as one of the market's strongest value stocks.


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