Core Viewpoint - Dow Inc. is facing significant challenges, with its stock price down approximately 50% since its spin-off in April 2019, and currently yielding 10.3%, the highest in the S&P 500 [1][17] Industry Overview - Dow operates in the commodity chemicals sector, producing a wide range of products used across various industries, including electronics, food packaging, textiles, and healthcare [4] - The company lacks pricing power due to the commoditized nature of its products, similar to the oil and gas industry, necessitating scale and operational efficiency to remain competitive [5] Economic Challenges - Recent economic conditions have led to low demand for Dow's products, driven by high borrowing costs and slowing growth in key markets, particularly Europe [6] - Increased competition from China, which is investing heavily in manufacturing, poses a threat to Dow's market share and pricing [7] Financial Performance - Dow's latest quarter showed a 3% decline in net sales despite a sixth consecutive quarter of year-over-year volume growth, indicating competitive pressures [9] - The company's operating margin has decreased significantly from pre-pandemic levels of around 8% to just 3.3% currently, with a profit margin of less than 1% [9][11] Cash Flow and Dividend Sustainability - Dow is currently free-cash-flow negative, relying on asset sales and debt to cover its dividend expenses [11][12] - The company has paused its Path2Zero project to save $1 billion, reducing enterprise spending from $3.5 billion to $2.5 billion [8] - A recent asset sale netted Dow $2.4 billion, covering dividend expenses for approximately five quarters [13][14] Future Outlook - Dow is projected to receive around $6 billion in additional cash or cost savings, which may help support its dividend in the short term [15] - The company has manageable debt levels, with only $500 million maturing in 2025, but continued low margins may necessitate a dividend cut [16] - Dow's long-term goal is for its dividend to represent 45% of operating income, which may require either margin improvements or a reduction in the dividend payout [19][20]

WESTPORT, Conn., May 22, 2025 /PRNewswire/ -- Gemspring Capital Management, LLC ("Gemspring"), a middle-market private equity firm, is pleased to announce that an affiliate has entered into a definitive agreement to acquire The Goodyear Tire & Rubber Company's (NASDAQ: GT) ("Goodyear" or the "Company") polymer chemicals business ("Goodyear Chemical" or the "Business"). The acquisition includes two operating plants located in Houston and Beaumont, Texas, and a research and development facility located in Akr ...

AKRON, Ohio, May 22, 2025 /PRNewswire/ -- The Goodyear Tire & Rubber Company (NASDAQ: GT) ("Goodyear" or the "Company") today announced that it has signed a definitive agreement to sell the majority of its Goodyear Chemical business to Gemspring Capital Management, LLC. The transaction follows a previously announced strategic review of Goodyear's Chemical business in connection with the Goodyear Forward transformation plan.Goodyear Chemical is a leading producer of synthetic rubber, offering a broad product ...