DEERE & CO (DE) Stock Fundamental Analysis
NYSE:DE - New York Stock Exchange, Inc. - US2441991054 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to DE. DE was compared to 128 industry peers in the Machinery industry. DE scores excellent on profitability, but there are concerns on its financial health. DE is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year DE was profitable.
DE had a positive operating cash flow in the past year.
In the past 5 years DE has always been profitable.
Each year in the past 5 years DE had a positive operating cash flow.
1.2 Ratios
DE has a better Return On Assets (6.03%) than 63.20% of its industry peers.
Looking at the Return On Equity, with a value of 27.66%, DE belongs to the top of the industry, outperforming 92.00% of the companies in the same industry.
With a decent Return On Invested Capital value of 11.18%, DE is doing good in the industry, outperforming 76.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for DE is in line with the industry average of 11.00%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.03% | ||
| ROE | 27.66% | ||
| ROIC | 11.18% |
ROA(3y)8.1%
ROA(5y)7.01%
ROE(3y)37.65%
ROE(5y)33.31%
ROIC(3y)12.67%
ROIC(5y)11.11%
1.3 Margins
DE has a better Profit Margin (12.94%) than 84.00% of its industry peers.
In the last couple of years the Profit Margin of DE has grown nicely.
DE has a better Operating Margin (23.44%) than 95.20% of its industry peers.
DE's Operating Margin has improved in the last couple of years.
DE's Gross Margin of 40.44% is fine compared to the rest of the industry. DE outperforms 74.40% of its industry peers.
In the last couple of years the Gross Margin of DE has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 23.44% | ||
| PM (TTM) | 12.94% | ||
| GM | 40.44% |
OM growth 3Y8.52%
OM growth 5Y11.73%
PM growth 3Y0.43%
PM growth 5Y10.67%
GM growth 3Y8.89%
GM growth 5Y6.87%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), DE is creating some value.
The number of shares outstanding for DE has been reduced compared to 1 year ago.
Compared to 5 years ago, DE has less shares outstanding
Compared to 1 year ago, DE has an improved debt to assets ratio.
2.2 Solvency
The Debt to FCF ratio of DE is 15.22, which is on the high side as it means it would take DE, 15.22 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of DE (15.22) is worse than 64.00% of its industry peers.
A Debt/Equity ratio of 2.29 is on the high side and indicates that DE has dependencies on debt financing.
DE has a Debt to Equity ratio of 2.29. This is amonst the worse of the industry: DE underperforms 92.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.29 | ||
| Debt/FCF | 15.22 | ||
| Altman-Z | N/A |
ROIC/WACC1.11
WACC10.06%
2.3 Liquidity
A Current Ratio of 0.92 indicates that DE may have some problems paying its short term obligations.
DE has a worse Current ratio (0.92) than 94.40% of its industry peers.
DE has a Quick Ratio of 0.92. This is a bad value and indicates that DE is not financially healthy enough and could expect problems in meeting its short term obligations.
DE's Quick ratio of 0.69 is on the low side compared to the rest of the industry. DE is outperformed by 88.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.92 | ||
| Quick Ratio | 0.69 |
3. Growth
3.1 Past
DE shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -34.42%.
The Earnings Per Share has been growing by 20.90% on average over the past years. This is a very strong growth
Looking at the last year, DE shows a very negative growth in Revenue. The Revenue has decreased by -20.97% in the last year.
The Revenue has been growing slightly by 5.62% on average over the past years.
EPS 1Y (TTM)-34.42%
EPS 3Y10.6%
EPS 5Y20.9%
EPS Q2Q%-48.8%
Revenue 1Y (TTM)-20.97%
Revenue growth 3Y5.54%
Revenue growth 5Y5.62%
Sales Q2Q%-35.07%
3.2 Future
The Earnings Per Share is expected to grow by 13.58% on average over the next years. This is quite good.
The Revenue is expected to grow by 8.39% on average over the next years. This is quite good.
EPS Next Y-22.92%
EPS Next 2Y-6.22%
EPS Next 3Y0.39%
EPS Next 5Y13.58%
Revenue Next Year-15.73%
Revenue Next 2Y-4.98%
Revenue Next 3Y-1%
Revenue Next 5Y8.39%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past 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
DE is valuated rather expensively with a Price/Earnings ratio of 21.72.
DE's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 29.63, DE is valued a bit cheaper.
DE is valuated rather expensively with a Price/Forward Earnings ratio of 21.76.
DE's Price/Forward Earnings is on the same level as the industry average.
DE is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.72 | ||
| Fwd PE | 21.76 |
4.2 Price Multiples
DE's Enterprise Value to EBITDA is on the same level as the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as DE.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.55 | ||
| EV/EBITDA | 13.78 |
4.3 Compensation for Growth
The excellent profitability rating of DE may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.04
EPS Next 2Y-6.22%
EPS Next 3Y0.39%
5. Dividend
5.1 Amount
DE has a Yearly Dividend Yield of 1.27%.
DE's Dividend Yield is a higher than the industry average which is at 1.67.
With a Dividend Yield of 1.27, DE pays less dividend than the S&P500 average, which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.27% |
5.2 History
The dividend of DE is nicely growing with an annual growth rate of 14.18%!
DE has been paying a dividend for at least 10 years, so it has a reliable track record.
DE has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)14.18%
Div Incr Years3
Div Non Decr Years33
5.3 Sustainability
DE pays out 26.09% of its income as dividend. This is a sustainable payout ratio.
DE's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP26.09%
EPS Next 2Y-6.22%
EPS Next 3Y0.39%
489.98
-5.81 (-1.17%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners79.8%
Inst Owner Change2.42%
Ins Owners0.15%
Ins Owner Change0.07%
Market Cap133.45B
Analysts75
Price Target491.93 (0.4%)
Short Float %1.97%
Short Ratio4.1
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.27% |
Yearly Dividend5.8
Dividend Growth(5Y)14.18%
DP26.09%
Div Incr Years3
Div Non Decr Years33
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)6.96%
Min EPS beat(2)-0.37%
Max EPS beat(2)14.29%
EPS beat(4)3
Avg EPS beat(4)6.93%
Min EPS beat(4)-0.37%
Max EPS beat(4)14.29%
EPS beat(8)7
Avg EPS beat(8)10.23%
EPS beat(12)9
Avg EPS beat(12)7.14%
EPS beat(16)13
Avg EPS beat(16)9.17%
Revenue beat(2)0
Avg Revenue beat(2)-8.83%
Min Revenue beat(2)-14.13%
Max Revenue beat(2)-3.54%
Revenue beat(4)1
Avg Revenue beat(4)-4.05%
Min Revenue beat(4)-14.13%
Max Revenue beat(4)1.98%
Revenue beat(8)2
Avg Revenue beat(8)-2.06%
Revenue beat(12)5
Avg Revenue beat(12)0.71%
Revenue beat(16)9
Avg Revenue beat(16)2.99%
PT rev (1m)1.21%
PT rev (3m)12.93%
EPS NQ rev (1m)-2.58%
EPS NQ rev (3m)-25.99%
EPS NY rev (1m)-0.88%
EPS NY rev (3m)-12.61%
Revenue NQ rev (1m)-0.71%
Revenue NQ rev (3m)-14.24%
Revenue NY rev (1m)-0.25%
Revenue NY rev (3m)-8.46%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.72 | ||
| Fwd PE | 21.76 | ||
| P/S | 2.78 | ||
| P/FCF | 31.55 | ||
| P/OCF | 14.82 | ||
| P/B | 5.94 | ||
| P/tB | 7.55 | ||
| EV/EBITDA | 13.78 |
EPS(TTM)22.56
EY4.6%
EPS(NY)22.51
Fwd EY4.6%
FCF(TTM)15.53
FCFY3.17%
OCF(TTM)33.07
OCFY6.75%
SpS176.38
BVpS82.54
TBVpS64.88
PEG (NY)N/A
PEG (5Y)1.04
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.03% | ||
| ROE | 27.66% | ||
| ROCE | 16.06% | ||
| ROIC | 11.18% | ||
| ROICexc | 12.21% | ||
| ROICexgc | 13.67% | ||
| OM | 23.44% | ||
| PM (TTM) | 12.94% | ||
| GM | 40.44% | ||
| FCFM | 8.81% |
ROA(3y)8.1%
ROA(5y)7.01%
ROE(3y)37.65%
ROE(5y)33.31%
ROIC(3y)12.67%
ROIC(5y)11.11%
ROICexc(3y)13.82%
ROICexc(5y)12.29%
ROICexgc(3y)15.19%
ROICexgc(5y)13.56%
ROCE(3y)19.77%
ROCE(5y)16.94%
ROICexcg growth 3Y3.38%
ROICexcg growth 5Y8.81%
ROICexc growth 3Y3.46%
ROICexc growth 5Y9.63%
OM growth 3Y8.52%
OM growth 5Y11.73%
PM growth 3Y0.43%
PM growth 5Y10.67%
GM growth 3Y8.89%
GM growth 5Y6.87%
F-Score6
Asset Turnover0.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.29 | ||
| Debt/FCF | 15.22 | ||
| Debt/EBITDA | 3.85 | ||
| Cap/Depr | 222.5% | ||
| Cap/Sales | 9.94% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 67.18% | ||
| Profit Quality | 68.03% | ||
| Current Ratio | 0.92 | ||
| Quick Ratio | 0.69 | ||
| Altman-Z | N/A |
F-Score6
WACC10.06%
ROIC/WACC1.11
Cap/Depr(3y)216.52%
Cap/Depr(5y)180.17%
Cap/Sales(3y)7.95%
Cap/Sales(5y)7.44%
Profit Quality(3y)38.56%
Profit Quality(5y)75.49%
High Growth Momentum
Growth
EPS 1Y (TTM)-34.42%
EPS 3Y10.6%
EPS 5Y20.9%
EPS Q2Q%-48.8%
EPS Next Y-22.92%
EPS Next 2Y-6.22%
EPS Next 3Y0.39%
EPS Next 5Y13.58%
Revenue 1Y (TTM)-20.97%
Revenue growth 3Y5.54%
Revenue growth 5Y5.62%
Sales Q2Q%-35.07%
Revenue Next Year-15.73%
Revenue Next 2Y-4.98%
Revenue Next 3Y-1%
Revenue Next 5Y8.39%
EBIT growth 1Y-27.44%
EBIT growth 3Y14.52%
EBIT growth 5Y18.01%
EBIT Next Year-7.08%
EBIT Next 3Y2.67%
EBIT Next 5Y12.72%
FCF growth 1Y112.56%
FCF growth 3Y-4.88%
FCF growth 5YN/A
OCF growth 1Y49.97%
OCF growth 3Y6.11%
OCF growth 5Y22.02%