DEERE & CO (DCO.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:DCO - US2441991054 - Common Stock
434.4 EUR
-11.55 (-2.59%)
We assign a fundamental rating of 5 out of 10 to DCO. DCO was compared to 111 industry peers in the Machinery industry. While DCO has a great profitability rating, there are quite some concerns on its financial health. While showing a medium growth rate, DCO is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
- DCO had positive earnings in the past year.
- DCO had a positive operating cash flow in the past year.
- Each year in the past 5 years DCO has been profitable.
- DCO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- Looking at the Return On Assets, with a value of 4.74%, DCO is in the better half of the industry, outperforming 63.06% of the companies in the same industry.
- With an excellent Return On Equity value of 19.37%, DCO belongs to the best of the industry, outperforming 84.68% of the companies in the same industry.
- DCO has a Return On Invested Capital of 9.46%. This is in the better half of the industry: DCO outperforms 73.87% of its industry peers.
- DCO had an Average Return On Invested Capital over the past 3 years of 12.10%. This is above the industry average of 9.21%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.74% | ||
| ROE | 19.37% | ||
| ROIC | 9.46% |
ROA(3y)7.04%
ROA(5y)7.23%
ROE(3y)32.38%
ROE(5y)32.94%
ROIC(3y)12.1%
ROIC(5y)11.63%
1.3 Margins
- The Profit Margin of DCO (11.00%) is better than 85.59% of its industry peers.
- In the last couple of years the Profit Margin of DCO has grown nicely.
- With an excellent Operating Margin value of 20.63%, DCO belongs to the best of the industry, outperforming 92.79% of the companies in the same industry.
- DCO's Operating Margin has improved in the last couple of years.
- Looking at the Gross Margin, with a value of 38.36%, DCO is in line with its industry, outperforming 46.85% of the companies in the same industry.
- In the last couple of years the Gross Margin of DCO has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.63% | ||
| PM (TTM) | 11% | ||
| GM | 38.36% |
OM growth 3Y2.1%
OM growth 5Y5.11%
PM growth 3Y-6.97%
PM growth 5Y7.29%
GM growth 3Y8.4%
GM growth 5Y5.27%
2. Health
2.1 Basic Checks
- DCO has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- DCO has less shares outstanding than it did 1 year ago.
- Compared to 5 years ago, DCO has less shares outstanding
- DCO has a better debt/assets ratio than last year.
2.2 Solvency
- The Debt to FCF ratio of DCO is 19.79, which is on the high side as it means it would take DCO, 19.79 years of fcf income to pay off all of its debts.
- DCO has a worse Debt to FCF ratio (19.79) than 68.47% of its industry peers.
- A Debt/Equity ratio of 1.93 is on the high side and indicates that DCO has dependencies on debt financing.
- The Debt to Equity ratio of DCO (1.93) is worse than 88.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.93 | ||
| Debt/FCF | 19.79 | ||
| Altman-Z | N/A |
ROIC/WACC1.04
WACC9.12%
2.3 Liquidity
- A Current Ratio of 0.88 indicates that DCO may have some problems paying its short term obligations.
- With a Current ratio value of 0.88, DCO is not doing good in the industry: 92.79% of the companies in the same industry are doing better.
- DCO has a Quick Ratio of 0.88. This is a bad value and indicates that DCO is not financially healthy enough and could expect problems in meeting its short term obligations.
- With a Quick ratio value of 0.67, DCO is not doing good in the industry: 79.28% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.67 |
3. Growth
3.1 Past
- The earnings per share for DCO have decreased strongly by -26.99% in the last year.
- Measured over the past years, DCO shows a quite strong growth in Earnings Per Share. The EPS has been growing by 16.52% on average per year.
- DCO shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -11.66%.
- The Revenue has been growing slightly by 5.15% on average over the past years.
EPS 1Y (TTM)-26.99%
EPS 3Y-7.13%
EPS 5Y16.52%
EPS Q2Q%-13.63%
Revenue 1Y (TTM)-11.66%
Revenue growth 3Y-4.33%
Revenue growth 5Y5.15%
Sales Q2Q%14.06%
3.2 Future
- Based on estimates for the next years, DCO will show a very strong growth in Earnings Per Share. The EPS will grow by 23.15% on average per year.
- DCO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 15.42% yearly.
EPS Next Y-8.84%
EPS Next 2Y9.97%
EPS Next 3Y14.22%
EPS Next 5Y23.15%
Revenue Next Year7.15%
Revenue Next 2Y8.17%
Revenue Next 3Y7.96%
Revenue Next 5Y15.42%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 27.29, the valuation of DCO can be described as expensive.
- The rest of the industry has a similar Price/Earnings ratio as DCO.
- Compared to an average S&P500 Price/Earnings ratio of 27.25, DCO is valued at the same level.
- With a Price/Forward Earnings ratio of 29.94, DCO can be considered very expensive at the moment.
- Based on the Price/Forward Earnings ratio, DCO is valued a bit more expensive than 75.68% of the companies in the same industry.
- DCO is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.29 | ||
| Fwd PE | 29.94 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DCO indicates a slightly more expensive valuation: DCO is more expensive than 66.67% of the companies listed in the same industry.
- Based on the Price/Free Cash Flow ratio, DCO is valued a bit more expensive than 67.57% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 42.68 | ||
| EV/EBITDA | 16.36 |
4.3 Compensation for Growth
- The excellent profitability rating of DCO may justify a higher PE ratio.
- DCO's earnings are expected to grow with 14.22% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)1.65
EPS Next 2Y9.97%
EPS Next 3Y14.22%
5. Dividend
5.1 Amount
- DCO has a Yearly Dividend Yield of 1.24%.
- Compared to an average industry Dividend Yield of 1.48, DCO has a dividend in line with its industry peers.
- Compared to the average S&P500 Dividend Yield of 1.82, DCO is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.24% |
5.2 History
- The dividend of DCO is nicely growing with an annual growth rate of 15.79%!
Dividend Growth(5Y)15.79%
Div Incr Years4
Div Non Decr Years6
5.3 Sustainability
- 34.22% of the earnings are spent on dividend by DCO. This is a low number and sustainable payout ratio.
- DCO's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP34.22%
EPS Next 2Y9.97%
EPS Next 3Y14.22%
DEERE & CO / DCO.DE FAQ
What is the ChartMill fundamental rating of DEERE & CO (DCO.DE) stock?
ChartMill assigns a fundamental rating of 5 / 10 to DCO.DE.
What is the valuation status for DCO stock?
ChartMill assigns a valuation rating of 2 / 10 to DEERE & CO (DCO.DE). This can be considered as Overvalued.
What is the profitability of DCO stock?
DEERE & CO (DCO.DE) has a profitability rating of 8 / 10.
What is the valuation of DEERE & CO based on its PE and PB ratios?
The Price/Earnings (PE) ratio for DEERE & CO (DCO.DE) is 27.29 and the Price/Book (PB) ratio is 5.31.
What is the financial health of DEERE & CO (DCO.DE) stock?
The financial health rating of DEERE & CO (DCO.DE) is 2 / 10.