We recently published 12 Latest Stocks On Jim Cramer’s Radar. Dow Inc. (NYSE:DOW) is one of the stocks Jim Cramer recently discussed.
Dow Inc. (NYSE:DOW)’s shares are among the worst performers on the stock market in 2025 as they have lost 40% year-to-date. The firm has struggled due to sluggishness in the broader industrial sector and worries about the impact of tariffs on global trade. Dow Inc. (NYSE:DOW) also shocked investors in July when it slashed its dividend in half and revealed that its packaging revenue had dropped by 8.9% to $5 billion. Cramer isn’t a fan of the stock:
“Dow, can I have a reason? It’s like you’ve got to give me a reason to recommend the stock. You can’t just say you know what we’re going to buy it because it’s low. Cause a lot of that is going to derived by China and I’m not seeing it.”
After Dow Inc. (NYSE:DOW) halved its dividend, Cramer was full of words for the firm:
“A dividend sucker is born every minute. Last week, chemical giant Dow cut its dividend in half, taking it from 70 cents per quarter to 35 cents, saving about $1 billion annually… I heard that the dividend would protect the stock. When Dow’s dividend yield was 5%, the presumption was that you had to buy. Why? Because that was better than the 10-year treasury yield. See, people said you were basically being paid to wait for the chemical business to turn around…
Copyright: bialasiewicz / 123RF Stock Photo
Now, I’ve always championed the notion that we should be looking for what I call accidental high yields, stocks that have fallen so low, not based on the company, but on a market-wide move. Now, these stocks can be terrific investments, but was Dow an accidental high-yielder? If you look at its history, you know that Dow cut its dividend in March of 2009 from 42 cents to 15 cents. So it’s not like they have a long track record of consistency. No. The lesson of Dow is that if you see a yield that’s too high, it’s not a sign of safety, it’s a sign of danger…
I knew it was unsustainable. How did I know this? Two reasons: the declining cash flow and the declining stock itself. The stock was saying, the stock was screaming, my yield’s unsafe. The lesson here is you can’t reach for yield, which is exactly what people were doing, and they were buying Dow for that 5% yield. It’s not a defense, it’s a red flag, what it says is sell.”
While we acknowledge the risk and potential of DOW as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DOW and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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