The November rally was kind to Dow (DOW) with the stock up 10.4% from November 1 through December 1. The shares have given back some of that lately, but I’d still like to book any gains here ahead of a possible recession or at least a further economic slowdown in 2023.
I added this stock to the Dividend Portfolio back on December 10, 2021, because of its relatively high yield. The stock still shows an attractive yield of 5.53% but I’m worried that the shares could fall in any 2023 recession (or even just an economic slowdown) and wipe out my dividend payouts. The stock price is down 7.24% from the initiation of this position through the close on December 7. (The ex-dividend date on the shares was November 29 so investors holding for the dividend have been paid the most recent dividend.)
As a diversified chemical producer, Dow is inevitably exposed to the ups and downs of the business cycle for its end customers, With those customers concentrated in the consumer packaging, infrastructure, and automotive sectors, Dow will feel the effects of any slowing the economy and a recession would hit sales significantly.
I think I’d prefer to watch those developments from the sidelines.
