Dow Inc. (NYSE: DOW) traces its roots again to 1897. At present, the corporate generates greater than $57 billion in gross sales per yr, has almost 38,000 workers worldwide and manufactures in 31 international locations.
It makes all kinds of merchandise, starting from components and modifiers utilized in skincare, paints and paper to polymers utilized in wires, cables and packaging.
Over the previous century and 1 / 4, the corporate has undergone many modifications – acquisitions, spinoffs and consolidations.
The present model of Dow has paid a dividend since 2019. It has remained the identical at $0.70 per share every quarter, which comes out to a 5% yield.
The query is that this: Is the dividend secure?
Let’s discover out.
Free money move has been a bit inconsistent over the previous few years.
This yr, free money move is forecast to drop to $3 billion from $5.5 billion as earnings per share fall from $4.88 in 2022 to $2.32 and income declines almost 22%.
Dow pays $2 billion in dividends, so the projected payout ratio is a cushty 67%.
On account of the deteriorating free money move and the restricted dividend historical past, it’s onerous to declare the dividend secure. Ought to money move decay greater than anticipated, there’s an inexpensive probability that the dividend should be lower.
Dividend Security Ranking: C
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