{"id":19169,"date":"2025-08-07T23:37:56","date_gmt":"2025-08-07T23:37:56","guid":{"rendered":"https:\/\/finderica.com\/?p=19169"},"modified":"2025-08-07T23:37:56","modified_gmt":"2025-08-07T23:37:56","slug":"dow-is-one-cut-enough-for-this-6-4-yielder","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=19169","title":{"rendered":"Dow: Is One Cut Enough for This 6.4% Yielder?"},"content":{"rendered":"

A couple of weeks ago, Dow<\/strong> (NYSE: DOW) cut its dividend in half due to a \u201cprolonged industry downturn\u201d and \u201cto provide additional financial flexibility.\u201d<\/p>\n

That\u2019s typically not what you want to hear if you\u2019re a dividend investor.<\/p>\n

But Dow\u2019s new $0.35 per share quarterly dividend still equals a robust 6.4% yield. Can shareholders depend on the new lowered dividend, or is it likely to fall again?<\/p>\n

Dow had negative free cash flow in 2024 and is on pace for a repeat performance this year.<\/p>\n

Without positive free cash flow, the company cannot afford its dividend \u2013 or really any dividend. In order to pay shareholders, it needs to pull cash from the bank or borrow money.<\/p>\n

It does have $2.7 billion in cash, though it also has more than $15 billion in debt. Given that it\u2019s been burning several billion dollars a year in cash from operating its business, there likely won\u2019t be much cash left over to pay shareholders.<\/p>\n

Next year, free cash flow is forecast to be positive. But the $718 million in expected free cash flow is still below the nearly $1 billion that Dow will pay if it keeps the dividend at $0.35.<\/p>\n

<\/a>\"Chart:<\/a><\/p>\n

The company\u2019s dividend was steady for years at $0.70\u2026 until it wasn\u2019t. And once a dividend is reduced, it means management has broken that sacred vow with shareholders and is more likely to do it again.<\/p>\n

Given that the cash flow situation is not expected to turn around anytime soon, Dow\u2019s dividend cannot be considered safe.<\/p>\n

Dividend Safety Rating: F<\/strong><\/p>\n

\"Dividend<\/p>\n

What stock\u2019s dividend safety would you like me to analyze next? Leave the ticker in the comments section.<\/p>\n

You can also take a look to see whether we\u2019ve written about your favorite stock recently. Just click on the word \u201cSearch\u201d at the top right part of the Wealthy Retirement<\/em> homepage, type in the company name, and hit \u201cEnter.\u201d<\/p>\n

Also, keep in mind that Safety Net can analyze only individual stocks, not exchange-traded funds, mutual funds, or closed-end funds.<\/p>\n

The post Dow: Is One Cut Enough for This 6.4% Yielder? appeared first on Wealthy Retirement.<\/p>\n

Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

A couple of weeks ago, Dow (NYSE: DOW) cut its dividend in half due to a \u201cprolonged industry downturn\u201d and \u201cto provide additional financial flexibility.\u201d That\u2019s typically not what you want to hear if you\u2019re a dividend investor. But Dow\u2019s new $0.35 per share quarterly dividend still equals a robust 6.4% yield. Can shareholders depend<\/p>\n","protected":false},"author":2,"featured_media":19170,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[348],"tags":[419,2656,3116],"class_list":{"0":"post-19169","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-retirement","8":"tag-cut","9":"tag-dow","10":"tag-yielder"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/19169","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=19169"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/19169\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/19170"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=19169"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=19169"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=19169"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}