Dow Inc. (DOW): fair value, margin of safety and Wheel Score

Is DOW undervalued?

Dow Inc. (DOW) closed at 32.70 on 5 Nov 2026. The GLS average fair value - the simple average of the 3 valuation models that produced a positive number - is 49.06, which puts the price 33% below it. 2 of the 3 models value the shares above the current price. A gap this wide is rare in our universe of ~7,400 US stocks and is exactly what the Value part of the Wheel Score rewards; it is also where the question "why is it this cheap?" matters most.

Only 3 of the nine models produced a value (DCF, 10 Cap, DDM); the others need a dividend, positive free cash flow or positive book value the company does not have yet, so the average rests on a narrow base.

The nightly engine files DOW under Speculative - it is losing money or its Piotroski health score is 3 or lower - which caps its Wheel Score at 45 and keeps it out of the Sunday Scan. It also carries the Income tag (Income = a dividend yield of 4% or more).

Nine valuation models for DOW

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

Financial health is weak: DOW passes 4 of the nine Piotroski tests. Our scans drop the stock at the health filter; a low score is often the reason a stock looks cheap on the valuation models. The GLS Moat score is low at 2.8 out of 10: returns on capital, margins or the balance sheet have not shown a lasting edge yet - often a young company, a thin-margin business or one that has only recently turned profitable.

Returns on capital are thin or negative - ROIC -7.4%, ROE -16.4%, ROA -4.5% - with debt at 1.22 times equity and a free-cash-flow yield of 4.2%.

The dividend yield is high at 4.28% (payout ratio -278%). A yield this size is often the market's way of pricing a risk to the payout, so the health score and cash flow matter more than usual. Revenue comes mainly from Packaging & Specialty Plastics 52%, Industrial Intermediates & Infrastructu… 28%, Performance Materials & Coatings 20% (quarter Q3 FY2026).

Institutional ownership scores 10/10, insider activity 5/10 and Congressional trading 10/10 on the GLS smart-money scales; the last recorded Congressional buy was on 25 Sep 2026.

Wheel Score 55: Fair

DOW scores 55 out of 100 on the Wheel Score (Fair band, 50-69) because it fails filter 2, a real business, not a gamble - speculative (a loss, or a weak Piotroski score); and filter 4, financially healthy - Piotroski 4/9 (under 6); and filter 5, can repay its debt - 16.2 years to repay its debt (over 3). A stock must pass all 9 Wheel Trade Filters to reach 70. Otherwise the parts read: value strong, premium strong, moat weak, health fair, red flags strong, option trading strong, stability strong.

Implied volatility is 41% on the near-the-money contracts 20-60 days out - inside the 35-60% sweet spot the Wheel Score rewards most: enough premium to be worth selling, not so much that the risk is unpaid. The option chain is deep: 243,228 contracts of open interest across all expiries, which means tight fills at most strikes.

Volume runs at 12.4M shares a day on a market cap of $23.7B, with a beta of 0.39 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score rates that strong.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls: a stock must pass all 9 Wheel Trade Filters to score 70, and the score then ranks the ones that pass; the Sunday Scan is the top 10. It is updated nightly and is not a recommendation. How the Wheel Score works · the walkthrough lesson shows how it fits into a trade, start to finish.

Upcoming events

The next earnings report is due on 28 Jan 2027, 84 days away - outside the window of a 30-45-day put sold today. The shares go ex-dividend on 30 Nov 2026 (0.3500 per share), so a covered call sold before then carries a small early-assignment risk around that date.

Analysts upgraded DOW 2 times in the last 30 days with no downgrades; the latest action was new coverage by Needham on 26 Oct 2026.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

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