Dow Chemical - Comparative Multiple Analysis

Dow Chemical (Comparative Multiple Analysis)


Notes on the Comparative Multiple Analysis of Dow Chemical

WikiWealth compares Dow Chemical's revenue, EBITDA, and EBIT multiples to their peers in order to determine the appropriate fair valuation. Click in the top right corner to experiment with Dow Chemical's comparative analysis.

Notes from the analysis:

1. WikiWealth uses quantitative measures to determine the multiple range for Dow Chemical.
2. Free cash flow to the firm (FCF) multiple is free cash flow to equity holders plus interest owed to Dow Chemical's debt holders.
3. Multiples incorporate benefits due to economies of scale; WikiWealth compares absolute enterprise value multiples to competitor's multiples.
4. WikiWealth excludes outliers when calculating individual company multiples.

Helpful Information for Dow Chemical's Analysis

How does this work? The Comparative Investment Analysis determines the value of Dow Chemical by comparing Dow Chemical financial ratios, prices, growth rates, margins, etc. to those of relevant peer groups.

Value Investing Importance? This method is widely used by investment professionals to determine the correct price of investments, especially initial public offerings (IPOs). It is one element of WikiWealth's three Wall Street approaches used to determine the correct fair value of Dow Chemical.

See the Dow Chemical cash flow (DCF) analysis for a completely different approach that's popular on Wall Street for determining the value of an investment in Dow Chemical.

Also, see the Dow Chemical's buffett intrinsic valuation analysis for WikiWealth's attempt to replicate the investing formula's used by Warren Buffett and Dow Chemical's valuation conclusion for a quick summary.