Price to Earnings ratio is typically used for current valuation of a company and is one of the most popular ratios that investor monitor on a daily basis. Holding a low PE stock is less risky because. When a company's profitability fall, it is likely that earnings will also go down..In other words, if you start from a lower position your downside risk is limited. There are also some investors who believe that low Price to Earnings ratio reflects the low pricing because a given company is in trouble. On the other hand, a higher PE ratio means that investors are paying more for each unit of profit.
Generally speaking, the Price to Earnings ratio gives investors an idea of what the market is willing to pay for the company's current earnings.
Dow Chemical Price to Earning Assessment
Based on latest financial disclosure the price to earning indicator of The Dow Chemical Company is roughly 16.78 times. This is 48.9% lower than that of Basic Materials sector, and 42.1% lower than that of Chemicals - Major Diversified industry, The Price to Earning for all stocks is 34.43% higher than the company.
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Dow Chemical is rated below average in price to earning category among related companies.
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