Dow Chemical (DOW) Yielding 11% After K-Dow Deal Dies

With shares of Dow Chemical Co. (NYSE: DOW) trading down over 20% today, to $15 per share, the dividend yield has swelled to an astonishing 11%.

The pressure on the stock today is related to termination of the multi-billion dollar K-Dow Petrochemicals joint venture. In addition, the funds that the deal would have provided to Dow were crucial to the Rohm & Haas (NYSE: ROH) acquisition. Without access to that cash the company's credit ratings could be put at risk if more leverage is required to complete the deal.

Dow Chemical has publicly defended the $1.68 per share annual dividend payout, but with a major recession and an unstable merger deal, this is not an easy dividend play. But if shares of DOW can stabilize and the dividend is in fact maintained, new investors could be rewarded handsomely.

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