Is The Dow Chemical Company (DOW) a Buy?

There is no doubt about it, The Dow Chemical Company (NYSE:DOW) has a lot of money riding on cheap natural gas; it’s spending $4 billion to expand its Gulf Coast petrochemical facilities. However, instead of looking for ways to lock up its supply, Dow has been fighting to limit exports. On the other hand, Nucor Corporation (NYSE:NUE) which has joined Dow in its opposition to increased natural gas exports, has at least hedged its bets. The company entered into an agreement with EnCana Corporation (USA) (NYSE:ECA) to invest in natural gas wells to lock up much of its future needs. Dow might be better off walking away from its fight with Exxon Mobil Corporation (NYSE:XOM) over exports. Instead, it should follow Nucor Corporation (NYSE:NUE)’s lead and lock up its natural gas supply for the long term. I’d even bet that the nation’s No. 1 natural gas producer would make that deal, because as we all know, Exxon wins either way.

Foolish bottom line
The more I’ve explored The Dow Chemical Company (NYSE:DOW)’s position on natural gas exports, the less enthused I am of its outspoken disapproval exports. That being said, there are enough catalysts in Dow’s future to send its stock higher. That’s why I think you’d be better off buying Dow’s stock and collect it’s soon to grow 3.65% dividend while waiting for those catalysts to play out. Just be aware that Dow still has some issues that need to be worked through.

The article Dow Chemical Stock: Buy or Beware? originally appeared on Fool.com and is written by Matt DiLallo.

Motley Fool contributor Matt DiLallo owns units of Enterprise Product Partners and has the following options: Long Jan 2015 $70 Calls on Monsanto, Short Jan 2015 $70 Puts on Monsanto, and Short Jul 2013 $95 Calls on Monsanto Company (NYSE:MON). The Motley Fool recommends Nucor.

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