Using Hybrid Cloud To Meet The Challenges Of Modernizing Data Architectures

Abstract modern research and data background lines...getty

Cloud computing helps businesses by delivering on-demand computing power and resources swiftly, in many instances minimizing or eliminating the need to buy, install, and maintain new and expensive physical hardware and infrastructure. But at the same time, organizations still need to keep their most valuable data and IT systems within their own on-premises data centers due to key considerations such as security, privacy, safety, and meeting regulatory mandates.

That is why enterprises have adopted a hybrid cloud architecture across their IT operations that provides in many use cases greater software-as-a-service application flexibility, increased cost savings, more efficient processing, and storage capabilities, as well as broader options when it comes to governance and privacy. We see hybrid cloud as integral in the accelerating adoption of data warehouse platforms that function as a containerized application for developing highly performant, self-service data warehouses in the cloud which can be scaled dynamically and upgraded independently.

With hybrid cloud, in alignment with their multi-cloud implementations, organizations can continue to have their own private, on-premises IT infrastructure for their most mission critical data and systems, while also bringing in public cloud resources to advance their hybrid data and data architecture modernization strategies.

The hybrid cloud trend runs in parallel with broader multi-cloud adoption as it allows organizations to use more than one public cloud service, with each public cloud service typically supporting different applications. However, hybrid cloud challenges must be addressed to realize hybrid cloud’s benefits.

Key Hybrid Cloud Challenges and Trends

Organizations are increasingly compelled to distribute and spread data throughout their data centers, private clouds, and public clouds to meet the expanding demands of collecting, storing, analyzing, and managing massive amounts of fast-growing data volumes usually in real-time. Plus, with more data now created and originating outside data centers, they are finding overall data administration more complex and creating new cost containment, performance, and integration challenges.

Today we find most organizations already have a hybrid cloud strategy in place that is increasingly aligned with their broader adoption of multi-cloud, analytics, and AI. As a result, organizations are ramping up their hybrid cloud as well as multi-cloud implementations to augment their on-premises data center and private cloud data warehouses with public cloud platforms.

In addition, legacy data warehouses frequently lack granular control over resources allocated to jobs and tasks as well as the ability to support multiple versions of tools and engines. Accordingly, we see that users, groups, and workloads are required to use the same versions of query engines and tools. Such interdependency muddles operations and the upgrade process and can suppress innovation, especially across hybrid cloud environments.

Why Hybrid Cloud? Attaining More Hybrid Data Optimization and Flexibility

One key benefit of hybrid cloud is that it can provide more technological and process freedom for businesses. Instead of being limited by existing on-premises data center capabilities, using hybrid cloud allows organizations to quickly respond to their unique business needs by accessing additional compute resources through public cloud platforms, creating more data workload optimization and management flexibility.

The value of this option is that public cloud services can be available at the push of a button and configured automatically according to customer data workload demands and policies, including elastic up/down scaling capabilities. This kind of flexibility and measurable cost structure is especially critical today, as intricate macroeconomic conditions continue to challenge businesses around the world.

By having a hybrid cloud strategy, growing businesses can move quickly on their topmost compute needs rather than having to wait until costly infrastructure is budgeted, planned, and eventually installed. Opting for hybrid cloud can mean optimizing compute resources in areas such as streamlined upgrade processes and operations, accelerating time to market and innovation, as well as keeping operational costs manageable.

Hybrid Cloud Helps Address Data Storage Complexities

Hybrid cloud also enables organizations to make better business decisions by giving them a more flexible storage framework. Today, organizations typically store data in individual repositories maintained for each data center, creating a complex and fragmented data storage system that leads to bottlenecks and inefficient data operations. This is why we see organizations rapidly adopting the data lakehouse across their hybrid cloud architecture.

The data lakehouse blurs the line between structured and unstructured data, enabling organizations to store all types of raw data in one location, while still having a storage layer on top to provide transactional views of data and structured data management and analytics when needed. And by transitioning to hybrid cloud, enterprises can attain advantages through being able to bring together and pool all those isolated repositories together to create a unified data lakehouse as well as distributed data warehouse implementation.

This hybrid data approach allows access to more insights and information through streamlined access and administration of their overall data. While we are seeing versions of this from a number of data platform providers such as AWS, IBM, Oracle, Teradata, and Snowflake, a robust example of what I am speaking about is the Cloudera Data Platform (CDP).

CDP provides its users with a unified platform that offers portable, interoperable data analytics essential to optimizing the entire data lifecycle and more efficient management of distributed data. This applies to any data running across the organization’s hybrid cloud including public cloud, on premises, and edge environments. CDP’s common security, governance, metadata, replication, and automation provided by Cloudera Shared Data Experience (SDX) also enables the platform to operate as an integrated system.

Different vendors each have slightly different approaches to offering the tools and technology required for enterprise data leaders. It’s important for enterprises to carefully select the right platform to meet its data and analytics needs, but the benefits of a hybrid data approach should be a key consideration.

Flexibly pooling is another feature critical to a hybrid data strategy. This feature pools critical business data together, regardless of where it is physically stored, and is another major benefit of the hybrid cloud approach to break down data silos within organizations and deliver unified data management. Improved data management delivered by hybrid cloud is a huge boon for enterprises that are seeking to modernize their aging business operations.

Hybrid Cloud Helps Organizations Improve Business Outcomes

Immense flexibility is one of the greatest strengths of hybrid cloud. Growing businesses, including small to mid-sized businesses (SMBs) and large enterprises, can be thwarted when their internal IT operations are unable to meet their hybrid data requirements. But by being able to flexibly access power, performance, storage, and networking resources, organizations can react more quickly to growth opportunities and improve business outcomes.

Another benefit of hybrid cloud is that it is not an either-or decision. For many companies, moving their operations to the cloud can be worrisome due to factors such as regulatory and legal concerns. With hybrid cloud, that either-or decision is less onerous since it can allow organizations to use hybrid cloud according to their technical and business priorities.

Another part of the hybrid cloud value proposition is that going the hybrid cloud route means that organizations can avoid vendor lock in. Organizations opting to embrace a hybrid cloud strategy can gain more flexibility in balancing and optimizing their on-premises and public cloud data resources. Workloads and data can be distributed across public cloud platforms, allowing for more choice based on both IT operational and business priorities.

Other Hybrid Cloud Benefits for 2023 and Beyond

The popularity of hybrid cloud is continuing to gain steam in post-pandemic 2023 as organizations are looking at a wide range of strategies, including hybrid cloud, to boost their IT operations and modernize their data platforms to improve competitiveness and better respond to uncertainties such as supply chain issues and macroeconomic pressures.

By adopting hybrid cloud, organizations can be better protected against downtime and data loss related to data center disruptions as well as from non-data center sources. With a hybrid cloud approach, organizations can improve the load-balancing and distribution of their critical operations during troubleshooting cycles.

As cloud computing continues to evolve and deliver more data management demands hybrid cloud will also continue its own unique growth by meeting data workload optimization goals across on-premise, public cloud, and edge environments, allowing organizations to avoid the fragmentation and limitations of a single environment approach and potentially debilitating trade-offs across any of their data realms.

By bringing both essential services together for customers, hybrid cloud is solidly positioned to deliver the flexibility, cost savings, security, and on-demand compute power needed by today’s IT organizations.

I am a principal analyst of Futurum Research and CEO of The Futurum Group. I spend my time researching, analyzing and providing the world’s best..

Source: Using Hybrid Cloud To Meet The Challenges Of Modernizing Data Architectures

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Viddeyo    https://jvz6.com/c/202927/382326/
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Vidently   https://jvz1.com/c/202927/387798/
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VidRaffle   https://jvz2.com/c/202927/386840/
VidSnatcher    https://jvz3.com/c/202927/342585
VidVoicer    https://jvz1.com/c/202927/379983/
Vidzura   https://jvz4.com/c/202927/385754/
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Voiclet   https://jvz4.com/c/202927/388755/
VR Studio  https://jvz8.com/c/202927/388296/
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Webprimo   https://jvz1.com/c/202927/379455/
WordPress Mastery   https://jvz1.com/c/202927/386249/
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XFUNNELS   https://jvz2.com/c/202927/310335
Xinemax  https://jvz1.com/c/202927/381749/
YoDrive   https://jvz2.com/c/202927/384700/
YoSeller   https://jvz4.com/c/202927/387544/
Your 3DPal   https://jvz2.com/c/202927/381685/
YTSuite   https://jvzoo.com/c/202927/381179
Zappable   https://jvz3.com/c/202927/367328/

 

GMB Local Business Directory A Free Business Listing From Google

GMB Listing is a free business listing from Google. It allows you to provide details and photos of your business, including your location, services, and products. Creating this free profile is a great way to increase your visibility across Google services.

Information from your Google Business Profile may appear in Google Search, Google Maps, and Google Shopping. If your customers want to find your new opening hours or want to call you to inquire about your health and safety protocols, you can bet they probably aren’t going to crack open the Yellow Pages.

Amid the Covid-19 pandemic, it’s more crucial than ever that you utilize and optimize GMB to display accurate, updated information about your business. If your business hours or description is out of date, you can lose a customer’s trust and miss out on the lifetime value of the relationship.

GMB Snap allows you and your clients to Rank higher in Google Maps, drive traffic, boost sales and profits. You can easily charge $1500/ client for helping them boost their rankings with almost zero work. The software does all for you. It’s a lucrative niche and marketers are looking out for such valuable service especially post pandemic…Read more details here:

Source: https://gmbsnap.com/

.

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‘The Alignment Factor’: Market Alignment With Segmentation and Differentiation

halbergman | Getty Images

A new, ongoing series from the authors of ‘Total Alignment’ continues with a look at how defining a segment and focusing on its needs gets you one step closer to your goals. Businesses small and large are being impacted by the pandemic, and entrepreneurs are not immune. In order to survive and prosper during these difficult times, it might be necessary to reinvest in your business concept and redesign your offerings.

As a successful entrepreneur, you have been aligned with your market, but are you still aligned? Do your customers need the same things as before, with the same mode of delivery? For example, imagine a previously successful restaurant that has lost its customers during the pandemic. Does the owner truly understand the current needs of his customers beyond the menu it used to offer or the ambiance it had created before?

Related: The Alignment Factor’: The Keys to Internal Alignment

What Is Market Segmentation?

In a nutshell, it’s grouping heterogenous people into homogeneous groups, or segments, by some criteria related to their needs. By defining a segment and focusing on the needs of that segment, and aligning products or services with those needs, you have taken steps toward market alignment. The key characteristics of a market segment could be similar customer needs or preferences.

In a company with multiple locations, a segment will likely account for geography, demography and choices people make, the type of services they value and the quality they expect. In a smaller company, it could be a subset of these criteria. Let’s look again at restaurants. Assuming the wearing of masks is a pretty universal requirement, the first pressing issue for owners is how to proceed over the next few months.

Should the restaurant continue to offer inside dining? If so, how do you protect the customers? Usually, this is met by distancing the tables farther apart, requiring the servers to wear masks and hopefully the kitchen staff to wear masks and gloves. But what about the substantial number of people who now want to-go meals? Should they be forced to walk into a restaurant where people are eating (obviously without masks) to pick up the food?

Or, more conveniently, can the restaurant offer to bring the food to the car? What about payment? Does the customer need to enter the dining room and present his credit card? Or can they pay over the phone or on the website when ordering? These issues are not unsolvable, yet many restaurants seem unable to adapt. Perhaps it is a rigidity in the way the owners see their establishments and an unwillingness to re-evaluate the new needs of the market segment they were serving.

It’s crucial to re-evaluate your customers and perhaps re-segment your market in line with the new reality. Otherwise, precious resources can be wasted on activities that are no longer in alignment. Flexibility and creativity at this juncture can mean the difference between success and failure.

What Is Differentiation?

After re-defining your market segments, you will have to identify what is important to customers in a segment likely to buy your product. Value drivers could be cost, quality, features, safety, buying experience, after-sale support, etc. In a restaurant, they could include the cost of items on the menu, the quality of the food (e.g. organic or not; using meat and poultry and sea food from sources that care for the animals well in a healthy environment), the variety in the menu, safety in the process of acquiring the food and eating, the restaurant experience and treatment received after the service is completed.

For each segment, evaluate the importance to the customers of each appropriate value driver on a scale of low to medium to high. For example, quality might be high for a segment while cost is a medium. Safety could be high, and follow-up support could be low. The evaluation should be based on data, not just opinion. You may need to use customer surveys to hear the voice of the customer.

Next, evaluate the same value drivers in terms of how your offering is different from your competitors. For example, is the quality you offer significantly better than your competitors? Is the cost you offer substantially lower than your competitors? Are the features you offer unique to you and unavailable to the customer from other suppliers?

As you evaluate your value drivers, you can assign a low, medium or high rating to each. For example, if your value driver is features, and you offer unique features no one else is providing, your differentiation would be high. If everyone offers the same features, then your differentiation is low. Again, the evaluation should be based on data.

After evaluating your differentiation on each of the value drivers, you have a set of two evaluations for each one: The first is how important the value driver is to the customer in a segment, and the second is the differentiation of that value driver from your competitors. You can plot the two evaluations on a two-dimensional grid, the scale being low, medium and high on both axes.

The value drivers that fall in the (High:High) category should become your primary focus, both in terms of the message you send to the customers in that segment and in terms of making absolutely sure that those value drivers are perceived by your customers as you promised — or even better. For example, if quality and safety have been evaluated as (High:High), your resources should be directed toward making sure your customers are aware of your differentiation and that your quality and safety are, in fact, at the highest possible levels.

Strategies for Each Segment

Your market segments don’t all deserves the same attention. You could close out some segments and put your investment into others, especially during these challenging times. As entrepreneurs, you will have a preference based on emotional attachments. This is dangerous, as your pet offering might not be appropriate for all segments. Having re-segmented your market during this pandemic, you are in a position to decide where to put your energies and investment.

You will have to choose the segments to grow, those that could stay at the same level of growth and those you should exit. How do you make such decisions? There are guides in the management literature to help you do this. Essentially, for each segment, you perform a two-fold evaluation: How strong is your segment compared to your strongest competitor in terms of the internal processes that deliver value to the customer? And how attractive is the segment to an investor?

If you are much stronger than your strongest competitor, then your strength in that segment would be high. If you are at the same level as your strongest competitor, your strength would be medium, and if you are weaker than your strongest competitor, your evaluation in that segment would be low.

As for market attractiveness, you will have to evaluate whether the market in a segment is extremely favorable, (considering a set of external criteria) or not. The external criteria could include the size of the market, the growth of the market and the profitability of the market. If the market segment is favorable, then the evaluation for that segment would be high. Otherwise, it could be medium or low. The value of this exercise is that it will enable you to see the relative position of your different segments compared to each other.

The segment with high strength and high market attractiveness (High:High) is the one that deserves your attention the most, and the segment that has low strength and low attractiveness (Low:Low) can be divested unless it provides input into an attractive segment. Other segments will require appropriate strategies based on their evaluation.

Related: The One System That Changes Employees’ Behavior

Strategic Mindset

The strategic mindset we are proposing in this article will help you arrive at a set of strategies appropriate to each of your market segments. To develop a strategy, you need to have identified your market segments, differentiation and the relative position of your segments on the business strength/market attractiveness continuum.

Choosing where to put your time and investment will be key to your survival and growth, enabling you to make sound decisions and use your precious financial and human resources to deliver maximum value to your customers.

By

Source: ‘The Alignment Factor’: Market Alignment With Segmentation and Differentiation

.

Related contents:

Undifferentiated marketing”. Business Dictionary. Archived from the original on 23 September 2020. Retrieved 3 June 2022.Based on Weinstein, A., Market Segmentation Handbook: Strategic Targeting for Business and Technology Firms, 3rd ed., Haworth Press, Binghamton, N.Y., 2004, p. 12Claessens, Maximilian.

Market Targeting – Targeting Market Segments effectively”. marketing-insider.eu. Retrieved 17 October 2020.Diaz Ruiz, Carlos A.; Kjellberg, Hans (December 20, 2020).

Feral segmentation: How cultural intermediaries perform market segmentation in the wild”. Marketing Theory. 20 (4): 429–457. doi:10.1177/1470593120920330. S2CID 219027435 – via DOI.org (Crossref).

Hospitality Marketing Management (Fifth ed.). John Wiley and Sons. p. 139. ISBN 978-0-470-08858-6. Retrieved 2013-06-08.Tynan, A.N and Drayton, J., “Market segmentation,” Journal of Marketing Management, Vol. 2, No. 3, 1987, DOI:https://dx.doi.org/10.1080/0267257X.1987.9964020.

Market Segmentation Analysis: Understanding It, Doing It, and Making It Useful. ISBN 9789811088186.

“Management Tools – Customer Relationship Management”. bain.com. Retrieved 23 November 2015.Marketing Insider, “Evaluating Market Segments”, Online: http://targetmarketsegmentation.com/target-market/secondary-target-markets/ Archived 2016-10-23 at the Wayback Machine

“B2B Market Segmentation Research” (PDF). circle-research.com. Archived from the original (PDF) on 12 April 2015. Retrieved 9 June 2015.Gupta, Sunil. Lehmann, Donald R.Goldstein, Doug.

“What is Customer Segmentation?” MindofMarketing.net, May 2007. New York, NY.Market Research Association, Glossary of Terms, Online:http://www.marketingresearch.org/issues-policies/glossary

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How New Innovations Are Helping Prevent Retail Injuries

Getty

According to the US Department of Labor, workplace injuries cost an estimated $161.5 billion yearly. In Wholesale and Retail Trade (WRT) establishments, lost workday injuries are caused mainly by slips, trips, and falls. A study in the United States in 2020 found that falls accounted for 33% of nonfatal injuries, making it the highest cause of preventable workplace nonfatal injuries. Moreover, falls were the third highest cause of preventable fatal workplace injuries at 21%.

According to The National Institute for Occupational Safety and Health (NIOSH), factors that can lead to workplace injuries include:

  • Workplace factors – Slippery surface, loose floor coverings, obstructed vision by boxes or containers, poor lighting, lack of maintenance of walking surfaces.
  • Work organization factors – High working pace that may cause workers to rush, tasks involving handling greasy or liquid materials that may make surfaces slippery.
  • Individual factors – Age, worker fatigue, and poor eyesight may affect vision and balance, and inappropriate footwear can cause tripping or slipping.

However, most WRT establishments have difficulty ensuring all health and safety protocols are adhered to both by employees and customers. The problem increases in a high-density environment with heavy human traffic. Managers are adopting innovative ways to complement the traditional solutions in the WRT stores.

Artificial Intelligence (AI), the Internet of Things (IoT), and Machine Learning (ML) have combined to detect, analyze, alert, and prevent hazards in the workplace. Workplace safety is significantly improved using real-time responses.

Computer vision

Computer vision uses digital inputs from images and videos to derive information meaningful to a computer. The computer then analyzes the information to detect defects.

SeeChange (AI provider) and Keymakr Inc. Inc. (data-annotation service provider) partnered to leverage AI in preventing slips, trips, and falls using existing CCTV cameras in Asda (supermarket chain in the UK) stores. Keymakr’s SaaS platform empowers SeeChange’s SpillDetect tool to detect liquid spills automatically. The system then sends notifications to the staff on the location of the hazard.

According to Michael Abramov, CEO of Keylabs, Keymakr’s Saas platform, “AI can be leveraged to detect accidents as soon as they happen and AI-based smart checkout systems can eliminate the human-error factor. Implementing AI can save buyers and business owners from such dangers.”

Abramov says that AI does not suffer from fatigue and can monitor non-stop. “The position of products on the shelves (and alert of a dangerous positioning) The condition of the floors (and report any incidents (spilled products, products that have fallen off shelves)). That’s not all of it as AI surveillance systems can monitor the entire store, providing insights into customer behaviors and preventing thefts.”

relEYEble solutions offer computer vision services and integrate with existing cameras to detect areas with the highest traffic in the store and monitor access to the premises. This feature helps reduce injuries caused by overcrowding and limited access and exits to a building in case of emergencies.

Fire detection systems traditionally have a response time of 3-5 minutes after detecting a fire. This time may be crucial, especially for large and fast-spreading fires, reducing the firefighting response time. Computer vision can detect fires from about 50m away and give an alert within 10-15 seconds. When connected to a PA system, the system can make an immediate announcement providing the fire’s exact location and the best exit route.

Ergonomic sensors

Injuries from manual handling of tasks are reduced through ergonomic training of workers. Optimum movement is sent to the worker to self-correct, paving the way for behavioral change.

One such company offering this solution is Soter Analytics. Soter devices worn on the shoulder, headset, helmet, and/or back monitor the risk of injury in real-time. The gadgets are paired with a mobile application to deliver tailored coaching to a specific worker for a particular task. Studies have shown that hazardous movement is reduced by 30-70%. Managers also have access to the data from the soter devices in real-time. The managers can then use the data to:

  • Identify hazards.
  • Filter hazard risk by task, department, or individual.
  • Identify priority areas requiring more focus.

According to Coca-Cola KO +0.4% Amatil Limited (CCA), they reduced the risk from manual handling by approximately 35% after using Soter’s SoterCoach and Clip&Go solutions for six months. Mr. Shawn Rush from Giant Eagle stated that the risk from the hazardous movement was reduced by nearly 50% for the team members who participated in the process.

Predictive data and analytics

Predictive analytics uses various data obtained from the organization and analyzes that data to forecast potential scenarios. The data collected and used in analytics include root causes and complaints and suggestions.

HGS Digital solutions collects, analyzes, and runs what-if scenarios to determine reasons for injury and provide corrective action to mitigate the problem. After entering the data into the program, the tool will analyze the information without being programmed.

Case management software

i-Sight is a case management software similar to HGS Digital Solution. Unlike HGS, I-Sight only collects, tracks, and provides comprehensive reports, and you have to use this information to prevent workplace injuries. I- sight tracks and reports incidents such as:

  • Accidents
  • Injuries
  • Slips and falls
  • Fatalities
  • Near misses
  • Dangerous exposures

Managers can use the i-Sight dashboard to monitor incident reports and possible trends to identify high-risk areas or employees that require urgent attention.

Self-braking trolleys

Autonomous vehicles (AVs) are usually associated with cars. According to Anthony Ireson from Ford of Europe, supermarket trolleys can also use the technology.

The trolley comes with a pre-collision assist to help customers avoid accidents or reduce the effect of a collision. The sensors on the trolley detect people and objects ahead in its path. The self-braking trolley automatically applies the brakes when it detects a potential collision.

Although the trolley is still a prototype in the Ford shop, its application will make run-away trolleys a thing of the past reducing accidents.

Robotics

Engineers from West Virginia University are developing robots to safeguard workers from workplace hazards. The robots detect risks found on floor surfaces in WRT establishments. Besides providing situational awareness, the robots would provide walkability maps and continually monitor the risks. Unlike other computer vision systems that use existing CCTV cameras in the establishment, the robots would be equipped with in-built cameras to reduce deception from surface appearance. The robots would also drive on the surface to better assess the slip risk.

The development of the robots focuses on three key factors:

  • Identification and evaluation of holistic risks involving the operation of the robots in the working spaces.
  • Use of robots in other aspects, such as shopping guides.
  • Effect of walkability maps and the robots on employees’ injury risk.

I’m a writer fascinated by the obvious and hidden dynamics between tech, culture and politics and how societies and habits are shaped by this interplay.

Source: How New Innovations Are Helping Prevent Retail Injuries

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Dow’s Cash Flow Increases The Safety Of Its Dividend Yield

On a price return basis, the Safest Dividend Yields Model Portfolio (+4.4%) outperformed the S&P 500 (+3.8%) by 0.6% from June 23, 2022 through July 19, 2022. On a total return basis, the Model Portfolio (+4.8%) outperformed the S&P 500 (+3.8%) by 1.0% over the same time. The best performing large cap stock was up 12% and the best performing small cap stock was up 14%. Overall, nine out of the 20 Safest Dividend Yield stocks outperformed their respective benchmarks (S&P 500 and Russell 2000) from June 23, 2022 through July 19, 2022.

This Model Portfolio only includes stocks that earn an attractive or very attractive rating, have positive free cash flow and economic earnings, and offer a dividend yield greater than 3%. Companies with strong free cash flow provide higher quality and safer dividend yields because I know they have the cash to support the dividend. I think this portfolio provides a uniquely well-screened group of stocks that can help clients outperform.

Since its spin-off from Dupont De Nemours Inc. (DD) in 2019, Dow has grown revenue by 13% compounded annually and net operating profit after-tax (NOPAT) by 65% compounded annually. Dow’s NOPAT margin rose from 6% in 2019 to 13% over the trailing twelve months (TTM), while invested capital turns improved from 0.7 to 1.1 over the same time. Rising NOPAT margins and invested capital turns drive the company’s return on invested capital (ROIC) from 4% in 2019 to 14% TTM.

Figure 1: Dow’s Revenue and NOPAT Since 2019

Dow has increased its regular dividend from $2.10/share in 2019 to $2.80/share in 2021. The current quarterly dividend, when annualized, provides a 5.5% dividend yield.

Dow’s free cash flow (FCF) comfortably exceeds its regular dividend payments. From 2019 to 2021, Dow generated $16.0 billion (43% of current market cap) in FCF while paying $5.7 billion in dividends. Over the TTM, Dow has generated $6 billion in FCF and paid $2 billion in dividends. See Figure 2.

Figure 2: Dow’s FCF vs. Regular Dividends Since 2019

Companies with strong FCF provide higher quality dividend yields because the firm has the cash to support its dividend. Dividends from companies with low or negative FCF cannot be trusted as much because the company may not be able to sustain paying dividends.

DOW Is Undervalued

At its current price of $52/share, DOW has a price-to-economic book value (PEBV) ratio of 0.3. This ratio means the market expects Dow’s NOPAT to permanently decline by 70%. This expectation seems overly pessimistic given that Dow grew NOPAT by 65% compounded annually since 2019.

Even if Dow’s NOPAT margin falls to 9% (vs. 13% over the TTM) and the company’s NOPAT falls 5% compounded annually over the next decade, the stock would be worth $75+/share today – a 44% upside. See the math behind this reverse DCF scenario. Should the company’s NOPAT not fall at such a steep rate, or even grow from current levels, the stock has even more upside.

Critical Details Found in Financial Filings by My Firm’s Robo-Analyst Technology

Below are specifics on the adjustments I make based on Robo-Analyst findings in Dow’s 10-K and 10-Qs:

Income Statement: I made $3.1 billion in adjustments with a net effect of removing $930 million in non-operating expenses (2% of revenue).

Balance Sheet: I made $16.6 billion in adjustments to calculate invested capital with a net increase of $11.3 billion. The most notable adjustment was $9.0 billion (18% of reported net assets) in other comprehensive income.

Valuation: I made $24.1 billion in adjustments with a net effect of decreasing shareholder value by $19.8 billion. Apart from total debt, one of the most notable adjustments to shareholder value was $6.1 billion in underfunded pensions. This adjustment represents 16% of Dow’s market value.

Disclosure: David Trainer, Kyle Guske II, Matt Shuler, and Brian Pellegrini receive no compensation to write about any specific stock, style, or theme.

New Constructs leverages reliable fundamental data to provide unconflicted insights into the fundamentals and valuation of private and public businesses.

Source: Dow’s Cash Flow Increases The Safety Of Its Dividend Yield

Critics by Macrotrends

Dow annual/quarterly free cash flow history and growth rate from 2017 to 2022. Free cash flow can be defined as a measure of financial performance calculated as operating cash flow minus capital expenditures.

  • Dow free cash flow for the quarter ending June 30, 2022 was 2,607.00, a year-over-year.
  • Dow free cash flow for the twelve months ending June 30, 2022 was , a year-over-year.
  • Dow annual free cash flow for 2021 was $4.79B, a 18.72% decline from 2020.
  • Dow annual free cash flow for 2020 was $5.893B, a 48.51% increase from 2019.
  • Dow annual free cash flow for 2019 was $3.968B, a 91.69% increase from 2018.

Dow annual/quarterly revenue history and growth rate from 2017 to 2022. Revenue can be defined as the amount of money a company receives from its customers in exchange for the sales of goods or services. Revenue is the top line item on an income statement from which all costs and expenses are subtracted to arrive at net income.

  • Dow revenue for the quarter ending June 30, 2022 was $15.664B, a 12.81% increase year-over-year.
  • Dow revenue for the twelve months ending June 30, 2022 was $60.129B, a 30.19% increase year-over-year.
  • Dow annual revenue for 2021 was $54.968B, a 42.62% increase from 2020.
  • Dow annual revenue for 2020 was $38.542B, a 10.27% decline from 2019.
  • Dow annual revenue for 2019 was $42.951B, a 13.41% decline from 2018.

Current and historical gross margin, operating margin and net profit margin for Dow (DOW) over the last 10 years. Profit margin can be defined as the percentage of revenue that a company retains as income after the deduction of expenses. Dow net profit margin as of June 30, 2022 is 11.06%.

Current and historical p/e ratio for Dow (DOW) from 2017 to 2022. The price to earnings ratio is calculated by taking the latest closing price and dividing it by the most recent earnings per share (EPS) number. The PE ratio is a simple way to assess whether a stock is over or under valued and is the most widely used valuation measure. Dow PE ratio as of August 03, 2022 is 5.40.

Current and historical current ratio for Dow (DOW) from 2017 to 2022. Current ratio can be defined as a liquidity ratio that measures a company’s ability to pay short-term obligations. Dow current ratio for the three months ending June 30, 2022 was 1.64.

Historical dividend payout and yield for Dow (DOW) since 2021. The current TTM dividend payout for Dow (DOW) as of August 03, 2022 is $2.80. The current dividend yield for Dow as of August 03, 2022 is 5.43%.

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