DOW, Dow Inc.
Read top to bottom, the owner's questions in the order an owner asks them: what the business is, whether the record holds, whether it survives and is any good, and what you would be paying. New to the questions? Start with the Method.
The business in brief
read the 10-K →What this business is and what moves its needle, read from the numbers in its filings. The quantitative detail is in the sections below; the verdict is left to you.
- What it is
- Revenue is led by Packaging & Specialty Plastics (50%) and Industrial Intermediates & Infrastructure (28%), with 2 more segments behind.
- Situation
- Unprofitable growth. no operating profit yet, judge it on revenue growth, gross-margin trajectory, cash burn and runway, never on an earnings multiple. Cyclical. margins collapse repeatedly across the cycle, a single year misleads; look at normalized, through-cycle earnings and the balance sheet at the trough.
- What moves the needle
- How hard the assets work, and what the inputs cost. What decides it: utilization, how much of the capex merely keeps the assets running, and what a downturn does to a heavy fixed-cost base.
- Is it a good business?
- Return on capital has rarely cleared the cost of capital (median 4%, above 15% in 1 of 9 years). Owner earnings agree: roughly 6% of revenue reaches owners as cash, though it swings. The cycle and the balance sheet decide this one, so weigh the worst year against the median, and read the 10-K.
Every line here is arithmetic from the company's own filings, not a model's opinion, and each figure appears in full in the sections below.
Where the money comes from
read the 10-K →Revenue spreads across 4 segments, the largest Packaging & Specialty Plastics at 50%.
- Packaging & Specialty Plastics50%$20.0B
- Industrial Intermediates & Infrastructure28%$11.2B
- Performance Materials & Coatings20%$8.1B
- Corporate2%$701M
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record, 2017–2025
realized figures from each filing, no estimates| 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|
| RevenueRevenue | $43.7B | $49.6B | $43.0B | $38.5B | $55.0B | $56.9B | $44.6B | $43.0B | $40.0B | $39.3B |
| Operating marginOp. mgn | 4.5% | 11.0% | −2.1% | 5.2% | 14.6% | 10.6% | 1.3% | 3.5% | −6.7% | −7.1% |
| Net incomeNet inc. | $465M | $4.6B | ($1.4B) | $1.2B | $6.3B | $4.6B | $589M | $1.1B | ($2.6B) | ($2.8B) |
| EPS (diluted)EPS | $0.62 | $6.21 | $-1.83 | $1.65 | $8.43 | $6.31 | $0.83 | $1.58 | $-3.69 | $-3.95 |
| Owner earningsOwner earn. | ($7.7B) | $2.2B | $4.0B | $5.0B | $5.5B | $5.7B | $2.8B | ($26M) | ($1.4B) | ($232M) |
| ROICROIC | 4% | 9% | -3% | 5% | 21% | 14% | 2% | 4% | -7% | -8% |
| CapexCapex | $2.8B | $2.1B | $2.0B | $1.3B | $1.5B | $1.8B | $2.4B | $2.9B | $2.5B | $2.3B |
| Capex / revenueCapex/rev | 6.4% | 4.2% | 4.6% | 3.2% | 2.7% | 3.2% | 5.3% | 6.8% | 6.2% | 5.8% |
| Capex vs depreciationCapex/dep | 1.10× | 0.72× | 0.67× | 0.44× | 0.53× | 0.66× | 0.90× | 1.02× | 0.87× | 0.81× |
| Total debtDebt | — | $19.6B | $16.4B | $17.0B | $14.5B | $15.1B | $14.9B | $15.7B | $17.8B | $17.3B |
| Cash & investmentsCash+inv | $6.2B | $2.8B | $2.4B | $5.1B | $3.0B | $3.9B | $3.0B | $2.2B | $3.8B | $4.1B |
| Net debt / (cash)Net debt | ($6.2B) | $16.8B | $14.0B | $11.8B | $11.5B | $11.2B | $11.9B | $13.5B | $14.0B | $13.1B |
Owner’s Scorecard
Will it survive?
- No meaningful interest burdenLittle or no interest expense reported
Little or no interest expense reported, the business isn't leaning on lenders to operate.
- Debt against an operating lossTotal debt $17.8B · operating income ($2.7B)
There's debt but no operating profit to measure it against, understand that combination before anything else about the company.
- Debt, net of cash $14.0BNet debtCash $3.8B + ST investments $21M − debt $17.8B
Netting $3.8B of cash and short-term investments against $17.8B of debt leaves $14.0B owed. Net debt is the leverage figure that matters; the gross ratio above ignores the cash already set against it. Strategic or illiquid investments aren't counted here.
- Capital-hungryDSO 43 + DIO 64 − DPO 40 days
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.
Is it a good business?
- Below averageNOPAT ($2.1B) ÷ invested capital $30.0B (debt + equity − cash)
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; below ~8% the company may destroy value as it grows. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- Consumes cashOwner Earnings ($1.4B) = operating cash $1.0B − capex $2.5B
What an owner could take out without starving the business. That's -4% of revenue. Honest caveat: capex here blends maintenance and growth, so steady-state Owner Earnings may run higher (see capex vs. depreciation).
- Loss, but cash-generativeNet income ($2.6B) · cash from operations $1.0B
The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did.
How is the cash used?
- No surplus to allocate
The business didn't generate positive Owner Earnings this year, so any distributions came from the balance sheet or borrowing, not from operations.
- Investing or harvesting? 0.87×MaintainingCapex $2.5B ÷ depreciation $2.8B
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Durability & moat, 2017–2025
A moat is a high return that doesn’t fade, reinvested at high returns. Here is what the record says, judgments, not another chart of the numbers.
- Profitable years 7 of 9
Lost money in 2 year(s), look at what happened there before trusting the average.
- Return on capital ≥ 15% 1 of 8 yrs
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 5% (FY2017) → −7% (FY2025)
Margins slipped over the record, competition or costs are biting in.
- Reinvestment, incremental ROIC returns capital
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
- Worst year 2025 · −6.7% op. margin
Operations went underwater in 2025, understand why before trusting the good years.
- Share count −0.6%/yr
The share count is shrinking, buybacks are quietly growing your slice of the business.
- Dividend record rising
Paid and raised the dividend across the record, the continuity Graham prized.
Solvent is not the same as cheap; growing is not the same as good. These are vital signs, not a verdict, the judgment is yours, and the filing is one click away.
How the cash was used, 2017–2025
Over the record, the business generated $35.1B of operating cash, and how management split it is, as Buffett insists, the job that matters most. Here it reads as a reinvestor, most operating cash is plowed back into the business.
- Reinvested$19.2B · 55%
- Dividends$14.2B · 40%
- Buybacks$5.1B · 14%
It reinvested $19.2B (55%) back into the business and returned $19.3B (55%) to owners, $14.2B in dividends, $5.1B in buybacks. It returned and reinvested more than it generated, the gap was covered by debt or existing cash.
Buybacks are gross of stock issued to employees; net of that, the real return to owners is lower (see Management & pay). And the mix alone doesn't grade management, what matters is the return earned on the dollars reinvested (see incremental ROIC in the durability report).
Management & pay
read the proxy →Two questions Buffett actually asks about pay: is stock compensation, a real expense, whatever the income statement pretends, quietly large, and is the top wildly out of line with the floor. He's no populist about it; he just wants pay that's rational and earned, and comp committees that aren't lapdogs.
- CEO pay ratio207:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio isn't proof of anything, some businesses are genuinely top-heavy in scarce skill, but a runaway figure is where Buffett starts asking whether the board is doing its job or just keeping the chair company.
Graham’s defensive-investor test
1 of 6 metGraham gave the defensive investor seven numerical criteria in The Intelligent Investor. Here they are, run mechanically on the filings, his framework, not our verdict. Meeting them is a floor of safety, not a reason to buy; missing one is no veto, since many fine modern businesses fail his strictest liquidity tests by design. The worth is in seeing exactly where a company stands against the canon, every number sourced.
- Adequate size PassRevenue ≥ $2B · $40.0B
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity NearCurrent ratio ≥ 2× · 1.97×
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt MissDebt ≤ working capital · $17.8B vs $8.9B WC
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability MissA profit every year (9-yr record) · 2 loss years
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record MissUninterrupted dividends · 8 of 9 yrs
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth MissEarnings +33% over the record · −124%
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Earnings are $-3.69/share and book value $22.50/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Graham would be the first to say a checklist is a starting point, not an answer. These are his defensive, bargain-hunter's tests, the cigar-butt lens. Buffett and Munger grew past it, paying fair prices for wonderful businesses; that lens lives in the moat and owner-earnings work above, and both still matter. Clearing Graham’s tests earns a closer look; failing them earns harder questions, not a dismissal.
What the price implies
reverse-DCFOwner earnings are negative today, so the usual reverse-DCF has nothing to grow. But that's exactly when a price makes its boldest promise. So we flip the question: type a price, and see the future profitability you'd have to believe to justify it.
Enter a price to run it.
It flips the reverse-DCF: the company must reach owner earnings that, valued at a mature multiple and discounted back at your rate, equal today's market cap, shown as the margin it must earn on revenue grown at your rate, from negative today. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this is for the genuinely unprofitable.
What the filing emphasizes, FY2025
read the 10-K →Each year a 10-K must name what could go wrong, in the company's own words. Here are the ones Graham and Buffett would stop on, each set against the figure from the same filings that bears on it, anchored to a period you can find in the record above. We point; the judgment is yours.
- Pricing power & competitionBusiness
Whether the company sets its price or takes it. Durable pricing power is the surest mark of a moat; price competition is the surest mark there isn't one.
“Coatings & Performance Monomers local price decreased across all geographic regions, primarily in acrylic monomers and architectural coatings, due to lower raw material costs and competitive pricing pressures.”
From the recordOperating margin−7.1% now (TTM), off a 14.6% peak (FY2021) - Supplier & input dependenceMD&A
A choke point upstream. A sole or limited supplier can dictate terms, and a single shortage can stop the line.
“Also, if the Company's key suppliers of feedstock and energy, which may include limited or single source suppliers, are unable to provide the raw materials or energy required for production, it could have a negative impact on the Company's results of operations.”
From the recordGross-margin cushion (TTM)6% - Concentrated dependenceMD&A
What the whole business leans on, a product, a platform, a partner. Concentration cuts both ways, and the filing is where management has to admit it.
“Although the Company considers that its patents, licenses and trademarks in the aggregate constitute a valuable asset, it does not regard its business as being materially dependent on any single or group of related patents, licenses or trademarks.”
From the recordOwner-earnings margin at stake (TTM)−1% - Debt terms & refinancingBusiness
The fine print behind the debt. Covenants and near-term maturities decide who is really in control when a year goes badly.
“TDCC's most significant debt covenant with regard to its financial position is the obligation to maintain the ratio of its consolidated indebtedness to consolidated capitalization at no greater than 0.70 to 1.00 at any time the aggregate outstanding amount of loans under the Five Year Competitive Ad…”
From the recordBalance sheet (TTM)$14.0B net debt · no real interest burden - Litigation & contingenciesBusiness
Claims an owner inherits. Most disclosure is boilerplate; this fires only on an actual matter, a named suit, a settlement, a contingency, a number.
“The consent decree required the Company to pay a $ 15 million cash settlement to be used for long-term maintenance and trustee-selected remediation projects with an additional $ 7 million to specified local projects managed by third parties.”
A judgment, not a number, weigh it against the filing yourself. - Cyclicality & demandMD&A
How the business behaves when the economy turns. A cyclical earns its keep across the whole cycle, not at the peak.
“Beginning with the third quarter of 2025, the Company's Board reduced the dividend by 50 percent to $0.35 per share, in response to the prolonged industry downturn.”
From the recordWorst year on record−6.7% operating margin (FY2025) - Regulation & policyBusiness
Rules that can rewrite the economics, tariffs, antitrust, data, export controls.
“In the second quarter of 2025, the Company settled a separate claim related to Groundwater Matters at a water storage district, resulting in a pretax charge of $ 64 million, included in "Cost of sales" in the consolidated statements of income and related to Corporate.”
A judgment, not a number, weigh it against the filing yourself.
What changed, FY2025 vs FY2024
read the 10-K →Most of a 10-K is boilerplate carried over verbatim; the signal is in what's new. These lines appear this year and weren't there last, figure updates filtered out, so only the language shift remains.
- “Shifts in tariffs, trade agreements, import/export restrictions, trade sanctions, sector specific trade barriers, and other governmental trade actions, whether enacted by the United States or other countries, especially those instituted in the Company's significant markets or markets where its signi…”
- “Adverse economic conditions, a contraction in the availability of credit in the marketplace, or changes in the Company's credit ratings, including failure to maintain an investment grade rating, could increase borrowing costs and reduce sources of liquidity, restricting the Company's flexibility to …”
- “On July 7, 2025, the Company announced additional restructuring actions, approved by its Board of Directors ("Board") on June 30, 2025, to rationalize its global asset footprint, including actions related to the three assets identified as part of the Company's expanded strategic review of its Europe…”
- “The Company also reported an impairment charge of $690 million related to goodwill associated with the Polyurethanes & Construction Chemicals reporting unit, a pretax impairment charge of $303 million related to the assets used for chlor-alkali, propylene oxide and brine production in Latin America,…”
- “On July 7, 2025, the Company announced additional restructuring actions, approved by its Board of Directors ("Board") on June 30, 2025, to rationalize its global asset footprint, including actions related to the three assets identified as part of the Company's expanded strategic review of its Europe…”
Classic text analysis over the filing itself, no model wrote a word of this, and every quote is the company's own.
Peers, Chemicals
The same industry, side by side on owner economics, compare, don't rank by a single number.● marks best in the group.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| DOWDow Inc. | $40.0B | 6% | -6.7% | -7% | -4% |
| DDDupont DE Nemours, Inc. | $6.8B | 35% | -5.3% | -1% | 4% |
| ALBAlbemarle Corporation | $5.1B | 13% | -7.1% | -2% | 13% |