Jim Cramer on Dow Inc.: “I Would Hold on to That”

Jim Cramer recently expressed a positive outlook on Dow Inc. (DOW), advising investors to hold the stock as he believes it can go higher following a strong last quarter. This current sentiment contrasts with his previous commentary on the chemical giant's decision to cut its quarterly dividend in half, from 70 cents to 35 cents, saving $1 billion annually, which had impacted investors who bought for yield.

Analysis

Jim Cramer recently expressed an optimistic outlook on Dow Inc. (DOW), advising investors to hold the stock based on a "good last quarter" and his belief that the stock "can go higher." This positive sentiment follows a period where the company's fundamentals, specifically its earnings performance, appear to have improved, shifting focus from previous concerns.

This current stance contrasts with Cramer's earlier commentary regarding Dow's significant dividend cut on July 28, which reduced the quarterly payout from 70 cents to 35 cents, saving approximately $1 billion annually. The dividend reduction had previously deterred yield-focused investors who bought the stock for its 5% yield, which was superior to the 10-year treasury at the time.

Dow Inc. operates in the chemical and material products sector, serving packaging, construction, transportation, and consumer industries with advanced plastics, coatings, silicones, and specialty materials. The shift in Cramer's view suggests a re-evaluation of the company's underlying business strength and future growth prospects beyond its capital return policy.

Key Decisions for Investors

• Investors should consider Jim Cramer's updated positive outlook on DOW, driven by recent strong quarterly performance, as a potential indicator of improving company fundamentals
• Evaluate the long-term implications of DOW's strategic dividend cut, which saved $1 billion annually, on its financial health and capacity for future growth investments
• Monitor DOW's subsequent earnings reports and management commentary for sustained operational strength and strategic execution to validate the current optimistic sentiment