Dr. Kenneth Conrad, Portfolio Manager at BMO Global Asset Management, says his firm picked up Dow Chemical Co (DOW) recently, and he likes the company because of its natural gas exposure as well as its dividend yield and buyback increases, among other positive characteristics.
“Dow Chemical is a beneficiary of the shale gas boom in the U.S., like Lyondell; it uses cheap natural gas liquids as an input for the process. They have a 3.4% yield. They just increased it 14%. They also increased their buyback by $5 billion to a total of $9.5 billion, which is 18% of their market cap,” Conrad said.
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Conrad says Dow Chemical beat Wall Street estimates on earnings and sales in the last quarter, and should continue to produce positive results as it moves into 2015.
“The company is doing quite well,” Conrad said. “They have been actively pruning their company to keep the best businesses, and they have some new facilities starting up in 2015 that should boost their earnings profile.”
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