8. Dow Inc. (NYSE:DOW)
Number of Hedge Fund Holders: 48
Dow Inc. (NYSE:DOW) is a global materials science company specializing in the production of plastics, industrial intermediates, coatings, and silicones. The company operates through three primary segments: Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure, and Performance Materials & Coatings. Dow serves diverse industries, including packaging, infrastructure, mobility, and consumer applications, with a presence in over 31 countries. The company was formed in 2019 following the separation from DowDuPont, which itself was a merger of Dow Chemical and DuPont in 2017. The Michigan-based company ranked second on our recent list of 10 Best Dividend Stocks Yielding at Least 7% According to Analysts.
Dow Inc. (NYSE:DOW) delivered its fifth consecutive quarter of YoY volume growth despite weak macroeconomic conditions, with 4Q 2024 net sales of $10.4 billion, down 2% YoY, and operating EBITDA of $1.2 billion, which was approximately flat compared to the same period last year. The company announced significant strategic actions including a $1 billion cost reduction target by 2026, primarily focused on third-party contract labor and purchased services, along with the elimination of approximately 1,500 roles. Dow entered into a definitive agreement with Macquarie Asset Management to sell a 40% equity stake in select US Gulf Coast infrastructure assets, expecting to generate approximately $2.4 billion in initial cash proceeds, with potential to increase to $3 billion if Macquarie exercises its option to increase stake to 49%.
In response to persistently weak global macroeconomic conditions, Dow Inc. (NYSE:DOW) announced a strategic review of select European assets, primarily in the polyurethanes business, where demand has been structurally challenged over the past 5 years. Additionally, DOW is reducing its 2025 CapEx spending by $300 million to $500 million compared to the previously disclosed target of $3.5 billion and will maintain these levels until a clear recovery materializes across broad portions of end markets. The company remains committed to maintaining its industry-leading dividend, with north of 65% of owners counting on that dividend as a priority. Despite the aforementioned macro headwinds, the insiders buying signal that the local bottom in stock price is likely in the rear-view mirror.
