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Opinions Lorne Steinberg
DowDuPont Inc.DWDPTOP PICKOct 23, 2017
Lorne SteinbergOwned
$71.55
Stock price when the opinion was issued
$136.67
As of Aug 24, 2026. Market Open.
chemicals
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DON'T BUY
When they split up the company, they bundled parts of the company he likes with parts he doesn't. Specifically, he doesn't want to be involved in the agricultural parts. The plastics part claims to be capturing content in automotive--but cars are a shrinking industry. If there are further splits, he'll take another look.
chemicals
HOLD
It split into three shares. DWDP-N was a holding company and he would continue to hold it. The AG company would be more challenged.
chemicals
COMMENT
Spin offs? The agra-chemicals business that will be spun off is not a holding he would buy into. There is uncertainty over genetic modification in the agricultural space, but he bought this in the past for the chemical side of the business. Dupont will target the chemical side and is expected to pay a 5% dividend yield.
chemicals
DON'T BUY
It is a corporate restructuring story that he expects to see trade as three separate companies. The components have not benefited from improving fundamental factors. There will eventually be better value and may take three years to accomplish their goals. Basic materials may be getting its footing, but the other components are slow to come about right now. He would look elsewhere.
chemicals
COMMENT
Breaking up to try to create shareholder value. Caution to Canadian investors: these will be taxable dividends unless the company applies to the CRA to make it not so. Check with your financial adviser. Cheap multiple. Part of it has a good long upside, but the chemicals part is more cyclical. Likes it, worth looking at.
chemicals
BUY ON WEAKNESS
Recent addition for him. Likes its underlying businesses. Its structure is causing uncertainty, but he sees this as an opportunity going forward. Will be more stalwart than tech stocks. It’s on sale, so an opportunity to add. Sit tight, good things to come with this company.
Zachary Curry Owned
chemicals
The merger between Dow and DuPont offers real cost synergies. Eventually this will be broken up into 3 companies, a specialty and agricultural company’s couples company and a materials company. When we get our breakup value of the stock and take out the cost synergies, he gets a valuation that the stock should be double where it is in the next 5 years. A very, very undervalued company. They are #1 in most of their major businesses. Plenty of free cash flow and lots of room for dividend increases in all 3 of the businesses. (Analysts’ price target is $79.)