This post is part of our Big Company, Small Town series, featuring large companies and the small towns in which they are headquartered.

The Dow Chemical (NYSE: DOW) is capitalized at about $40 billion dollars and produces a multitude of household and industrial products that probably touch most Americans lives in some way. It is the largest chemical company in the U.S. and number two worldwide (ahead of ExxonMobil and behind BASF), and it is also a leader in performance plastics.

On May 18, 1897, Dow Chemical incorporated, based on Herbert H. Dow's plan to manufacture and sell bleach on a commercial scale. A year later they were in full-scale commercial production. The Dow-in-diamond mark was created to help resolve product shipping problems. In 1900, the Midland Chemical Company merged into Dow Chemical.

The company was always evolving under the guidance of Mr. Dow, who in 1913 announced the company would exit the bleach business to refocus to the value of chlorine as a raw material, prompting Dow stock to rise dramatically.

Throughout the early part of the 20th century, Dow was a patent machine with multiple products being developed all the time, and the prosperity of the founders led to the creation of the Herbert H. and Grace A. Dow Foundation in 1936. This pattern has continued to this day.

Midland County was organized in 1850. By 1874, the Flint and Pere Marquette Railroad extended through the heart of Midland to Averill, three miles west. The city of Midland was incorporated in 1887, in congruence with the company. Midland is a company town and Dow Chemical's success enabled Midland to survive the end of the logging era and to grow and prosper, being global headquarters, Dow Chemical and Dow Corning Corporation.

Dow stock has been trading in the high $30s recently, down from a high of $47.96. From an investment perspective, there are many positives to consider. Two that jump out at me are the price-to-sales ratio of 0.71, which is very, very low, and the dividend yield, which is very high, exceeding 4%. It also has a lower than average P/E of 13, a decent ROE above 15, and good cash flow to go along with modest debt.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of DOW.

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