This week’s Stock of the Week is a global giant that is making moves that could greatly benefit investors.
DowDuPont Inc. (DWDP) is a well-diversified global agriculture, chemicals and materials-science company with excellent financial liquidity and a balance sheet strong enough to withstand any short-term worldwide economic downturn.
Its blended profit margins among its business segments are about 20%, a very high percentage in its field. Revenue was $79.5 billion last year and will likely be $85.6 billion this year and $88.4 billion in 2019. DowDuPont is essentially a conglomerate with market capitalization of $155 billion—and management is now working on spinning off as many as six of its seven business segments to maximize shareholder value. Over time, that may mean spinoffs of especially high-margin areas such as agroscience, biotechnology and crop protection.
Currently, the company is a strong defensive play in a late-stage bull market, with plenty of cash and high, defensible market share in its product lines. Its dividend of $1.52/share/yr., recently yielding 2.2%, appears secure.
Fiscal year: December. Earnings per share: 2019 est./$4.90…2018 est./$4.30…2017/$3.41.
Michael Underhill is chief investment officer at Capital Innovations LLC, Pewaukee, Wisconsin, which manages $150 million, and portfolio manager of the $23 million Oak Ridge Global Resources and Infrastructure Fund (INNNX). CapInnovations.com