Dow Inc. Shifts Capital Allocation Strategy, Prioritizing Debt Paydown

The Dow Inc. (DOW) has made significant changes to its capital allocation strategy, prioritizing debt paydown over share buybacks and dividend payments.

According to CEO Karen Carter, the company will use excess cash to pay down debt, which has accumulated to over $1 billion in the past 12 months. The CFO, Jeff Tate, stated that paying down debt is the top priority for excess cash, and the company aims to continue doing so throughout 2026.

The dividend payment has been reduced from $0.70 per share to $0.35 per share, with a payout ratio that has swung from 228.97% to -47.28%. The dividend yield stands at 4.84%, significantly lower than its high of 12.05%.

TIKR's mid-case model puts a target price of $33.93 on Dow stock by December 31, 2034, implying an 18.1% total return and a 4% annualized rate from the current price.