I purchased 35 shares @ 33.05/share giving me about a 3.9% yield on cost.
The Dow Chemical Company (DOW) is a diversified manufacturer and supplier of products used primarily as raw materials in the manufacture of customer products and services worldwide. It operates in six segments. Dow provides services to a range of industries, including appliance, automotive, agricultural, building and construction, chemical processing, electronics, furniture, house wares, oil and gas, packaging, paints, coatings and adhesives, personal care pharmaceutical, processed foods, pulp and paper, textile and carpet utilities, and water treatment. Its portfolio includes specialty chemical, advanced materials, agrosciences and plastics businesses deliver a range of technology-based products and solutions to customers in approximately 160 countries. In March 2012, the Company's subsidiary Dow AgroSciences LLC, divested its European Dithane fungicide business to Indofil Industries Ltd.
I found out Thursday that DOW increased their dividend by over 25% which brought their dividend near a 4% yield. I decided to pull the trigger early Friday morning. This was my first trade using my cell phone. I have to say I am impressed with ETrade mobile. DOW wasn't really on my radar until the huge dividend increase.
I owned DOW for part of last year, I got in on 10/04 at 22.04/share and sold out on 10/11 at 26.98/share after the quick run-up. It turns out that I should have just held the shares. Although they cut their dividend during the financial crisis, they have almost increased it back to where it once was. With natural gas staying cheap, this is boosting their profits and I believe they can continue increasing the dividend for the foreseeable future.
My grandpa worked for Dow Chemical so I've always been fond of the company. It doesn't look like DOW fits the typical dividend growth stock mold, at least over the past 5 years. Nothing wrong with taking a chance here and there if you see an opportunity.
ReplyDeleteThanks for the comment. They have a long history of paying dividends but they have decreased or kept the same a few times. This is more of an intermediate term hold and I will be monitoring all of my stocks. If they cut the dividend again, which I don't expect them to do anytime soon, then I will sell the stock.
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