Dow Stock: Is DOW Outperforming the Materials Sector?

Dow Stock: Is DOW Outperforming the Materials Sector?

Kritika Sarmah

Thu, September 10, 2026 at 12:31 PM GMT+3 3 min read

• DOW -2.21%
• XLB +0.25%

Based in Midland, Michigan, Dow Inc. (DOW) is a global materials science leader that develops and manufactures chemicals, plastics, coatings, silicones, and other advanced materials used across industries ranging from packaging and construction to automotive, electronics, and consumer products.

Companies valued between $10 billion and $200 billion are typically classified as "large-cap stocks," and DOW, with a market capitalization of $21.4 billion, fits the label perfectly. Its key competitive advantage is its global scale, deep materials-science expertise, and broad portfolio of essential chemicals and advanced materials.

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Despite its massive scale, DOW's recent rally has been far from a smooth ride. Its shares currently trade roughly 31.2% below their 52-week high of $42.74. In the past three months, the stock has fallen 11.5%, compared to the State Street Materials Select Sector SPDR ETF's (XLB) 1.2% increase.

However, the long-term picture is much more appealing. Dow has soared 21.8% over the past 52 weeks and is up 25.8% year to date. By comparison, XLB has climbed 13.5% in the past year and 13.3% in 2026.

Technically, the picture has also turned more cautious, with DOW recently slipping below both its 50-day and 200-day moving averages, signaling heightened volatility and near-term selling pressure.

DOW's outperformance over the past year reflects improving chemical pricing, stronger margins, aggressive cost reductions, and growing confidence that the company is emerging from a prolonged industry downturn. The company's self-help initiatives are also delivering ahead of plan, boosting margins and strengthening investor confidence in its turnaround.

Recent Q2 2026 results reinforced the turnaround, with sales rising 19.7% year over year to $12.09 billion, while operating EBITDA surged nearly 228.9% to $2.31 billion. Operating EBIT surged to $1.64 billion, up from a $21 million loss a year earlier. Its operating EPS stood at $1.44, compared to a loss per share of $0.42 in the prior-year quarter. Adding to the bullish case, Dow is accelerating cost reductions and productivity improvements through its Transform to Outperform program, which is now expected to generate more than $1.3 billion in 2026 self-help benefits.

Moreover, DOW's 4.73% dividend yield is another key strength, offering investors a solid income stream while they wait for the company's turnaround to gain further traction. The company's latest $0.35-per-share quarterly payout marks its 460th consecutive dividend since 1912, underscoring a remarkable track record of consistent shareholder returns.

DOW's momentum stands out even more against rival Celanese Corporation (CE), which has struggled to gain traction, falling marginallyover the past year and advancing just 5.1% so far in 2026.

The stock has received a consensus rating of "Moderate" from the 19 analysts in coverage, with the mean price target of $36.58, reflecting a premium of 24.4% from current levels.

On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com