Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put DowDuPont Inc. stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, DowDuPont has a trailing twelve months PE ratio of 18.2, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 20.2. If we focus on the long-term PE trend, DowDuPont’s current PE level puts it above its midpoint over the past five years, with the number having risen rapidly over the past few months.
However, the stock’s PE stands slightly below the Zacks Basic Materials sector’s trailing twelve months PE ratio, which stands at 17.3. This indicates that the stock is slightly stretched right now, compared to its peers.
Nevertheless, we should also point out that DowDuPont has a forward PE ratio (price relative to this year’s earnings) of just 15.3, so it is fair to say that a slightly more value-oriented path may be ahead for DowDuPont stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, DowDuPont has a P/S ratio of about 2.4. This is a bit lower than the S&P 500 average, which comes in at 3.3 right now.
Broad Value Outlook
In aggregate, DowDuPont currently has a Value Score of B, putting it into the top 40% of all stocks we cover from this look. This makes DowDuPont a solid choice for value investors.
What About the Stock Overall?
Though DowDuPont might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth Score of C and a Momentum Score of A. This gives DWDP a Zacks VGM score — or its overarching fundamental grade — of B. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s full year estimate has inched higher by 0.2% over the past 30 days on one upward revision, while there were no downward revisions in the same time frame. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Given such trends, the stock has a Zacks Rank #3 (Hold), which is why we are looking for in-line performance from the company in the near term.
Bottom Line
DowDuPont is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Despite having a Zacks Rank #3, the stock belongs to an industry which is ranked among the top 19% out of more than 250 Zacks industries, which indicates that broader factors are favorable for the company. Further, over the past two years, the industry has outperformed the broader market, as you can see below:
So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.
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Should Value Investors Choose DowDuPont (DWDP) Stock Now?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put DowDuPont Inc. stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, DowDuPont has a trailing twelve months PE ratio of 18.2, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 20.2. If we focus on the long-term PE trend, DowDuPont’s current PE level puts it above its midpoint over the past five years, with the number having risen rapidly over the past few months.
However, the stock’s PE stands slightly below the Zacks Basic Materials sector’s trailing twelve months PE ratio, which stands at 17.3. This indicates that the stock is slightly stretched right now, compared to its peers.
Nevertheless, we should also point out that DowDuPont has a forward PE ratio (price relative to this year’s earnings) of just 15.3, so it is fair to say that a slightly more value-oriented path may be ahead for DowDuPont stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, DowDuPont has a P/S ratio of about 2.4. This is a bit lower than the S&P 500 average, which comes in at 3.3 right now.
Broad Value Outlook
In aggregate, DowDuPont currently has a Value Score of B, putting it into the top 40% of all stocks we cover from this look. This makes DowDuPont a solid choice for value investors.
What About the Stock Overall?
Though DowDuPont might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth Score of C and a Momentum Score of A. This gives DWDP a Zacks VGM score — or its overarching fundamental grade — of B. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s full year estimate has inched higher by 0.2% over the past 30 days on one upward revision, while there were no downward revisions in the same time frame. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Dow Chemical Company (The) Price and Consensus
Dow Chemical Company (The) Price and Consensus | Dow Chemical Company (The) Quote
Given such trends, the stock has a Zacks Rank #3 (Hold), which is why we are looking for in-line performance from the company in the near term.
Bottom Line
DowDuPont is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. Despite having a Zacks Rank #3, the stock belongs to an industry which is ranked among the top 19% out of more than 250 Zacks industries, which indicates that broader factors are favorable for the company. Further, over the past two years, the industry has outperformed the broader market, as you can see below:
So, it might pay for value investors to delve deeper into the company’s prospects, as fundamentals indicate that this stock could be a compelling pick.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>