DEERE & CO (DE) Stock Fundamental Analysis
NYSE:DE - New York Stock Exchange, Inc. - US2441991054 - Common Stock - Currency: USD
DE gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 127 industry peers in the Machinery industry. DE has an excellent profitability rating, 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.
In the past year DE had a positive cash flow from operations.
Each year in the past 5 years DE has been profitable.
Each year in the past 5 years DE had a positive operating cash flow.
1.2 Ratios
DE has a Return On Assets of 5.32%. This is comparable to the rest of the industry: DE outperforms 56.69% of its industry peers.
The Return On Equity of DE (23.27%) is better than 86.61% of its industry peers.
With a decent Return On Invested Capital value of 9.46%, DE is doing good in the industry, outperforming 63.78% 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 10.77%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.32% | ||
| ROE | 23.27% | ||
| ROIC | 9.46% |
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
With an excellent Profit Margin value of 12.40%, DE belongs to the best of the industry, outperforming 81.10% of the companies in the same industry.
DE's Profit Margin has improved in the last couple of years.
The Operating Margin of DE (22.89%) is better than 95.28% of its industry peers.
In the last couple of years the Operating Margin of DE has grown nicely.
DE has a Gross Margin of 40.60%. This is in the better half of the industry: DE outperforms 74.80% of its industry peers.
DE's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.89% | ||
| PM (TTM) | 12.4% | ||
| GM | 40.6% |
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
DE has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
DE has less shares outstanding than it did 1 year ago.
DE has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, DE has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.52 indicates that DE is not a great score, but indicates only limited risk for bankruptcy at the moment.
DE has a worse Altman-Z score (2.52) than 60.63% of its industry peers.
The Debt to FCF ratio of DE is 15.31, which is on the high side as it means it would take DE, 15.31 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 15.31, DE is doing worse than 67.72% of the companies in the same industry.
A Debt/Equity ratio of 2.36 is on the high side and indicates that DE has dependencies on debt financing.
DE has a Debt to Equity ratio of 2.36. This is amonst the worse of the industry: DE underperforms 88.98% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.36 | ||
| Debt/FCF | 15.31 | ||
| Altman-Z | 2.52 |
ROIC/WACC1.01
WACC9.35%
2.3 Liquidity
A Current Ratio of 0.94 indicates that DE may have some problems paying its short term obligations.
The Current ratio of DE (0.94) is worse than 92.13% of its industry peers.
A Quick Ratio of 0.72 indicates that DE may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.72, DE is doing worse than 85.04% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.94 | ||
| Quick Ratio | 0.72 |
3. Growth
3.1 Past
DE shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -37.89%.
DE shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 20.90% yearly.
Looking at the last year, DE shows a very negative growth in Revenue. The Revenue has decreased by -22.29% in the last year.
DE shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.62% yearly.
EPS 1Y (TTM)-37.89%
EPS 3Y10.6%
EPS 5Y20.9%
EPS Q2Q%-22.16%
Revenue 1Y (TTM)-22.29%
Revenue growth 3Y5.54%
Revenue growth 5Y5.62%
Sales Q2Q%-17.92%
3.2 Future
The Earnings Per Share is expected to grow by 14.55% 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-24.47%
EPS Next 2Y-4.96%
EPS Next 3Y2.91%
EPS Next 5Y14.55%
Revenue Next Year-15.8%
Revenue Next 2Y-4.68%
Revenue Next 3Y-0.78%
Revenue Next 5Y8.39%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 24.90, the valuation of DE can be described as rather expensive.
DE's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of DE to the average of the S&P500 Index (27.35), we can say DE is valued inline with the index average.
DE is valuated rather expensively with a Price/Forward Earnings ratio of 22.26.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DE is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 37.54. DE is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.9 | ||
| Fwd PE | 22.26 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DE is on the same level as its industry peers.
The rest of the industry has a similar Price/Free Cash Flow ratio as DE.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.18 | ||
| EV/EBITDA | 14.54 |
4.3 Compensation for Growth
The excellent profitability rating of DE may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.19
EPS Next 2Y-4.96%
EPS Next 3Y2.91%
5. Dividend
5.1 Amount
DE has a Yearly Dividend Yield of 1.30%.
DE's Dividend Yield is a higher than the industry average which is at 1.87.
With a Dividend Yield of 1.30, DE pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.3% |
5.2 History
On average, the dividend of DE grows each year by 14.18%, which is quite nice.
DE has paid a dividend for at least 10 years, which is a reliable track record.
DE has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)14.18%
Div Incr Years4
Div Non Decr Years34
5.3 Sustainability
29.23% of the earnings are spent on dividend by DE. This is a low number and sustainable payout ratio.
DE's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP29.23%
EPS Next 2Y-4.96%
EPS Next 3Y2.91%
514.66
-0.51 (-0.1%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners75.35%
Inst Owner Change-1.03%
Ins Owners0.15%
Ins Owner Change-0.08%
Market Cap139.39B
Analysts73.94
Price Target551.37 (7.13%)
Short Float %1.85%
Short Ratio4.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.3% |
Yearly Dividend5.8
Dividend Growth(5Y)14.18%
DP29.23%
Div Incr Years4
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)7.58%
Min EPS beat(2)-0.37%
Max EPS beat(2)15.53%
EPS beat(4)3
Avg EPS beat(4)9.49%
Min EPS beat(4)-0.37%
Max EPS beat(4)15.53%
EPS beat(8)7
Avg EPS beat(8)11.03%
EPS beat(12)10
Avg EPS beat(12)8.56%
EPS beat(16)13
Avg EPS beat(16)8.76%
Revenue beat(2)1
Avg Revenue beat(2)-6.82%
Min Revenue beat(2)-14.13%
Max Revenue beat(2)0.49%
Revenue beat(4)2
Avg Revenue beat(4)-3.8%
Min Revenue beat(4)-14.13%
Max Revenue beat(4)1.98%
Revenue beat(8)2
Avg Revenue beat(8)-2.66%
Revenue beat(12)6
Avg Revenue beat(12)1.09%
Revenue beat(16)9
Avg Revenue beat(16)2.26%
PT rev (1m)-0.13%
PT rev (3m)9.44%
EPS NQ rev (1m)-1.25%
EPS NQ rev (3m)-15.41%
EPS NY rev (1m)0.13%
EPS NY rev (3m)-0.41%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.81%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)0.2%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.9 | ||
| Fwd PE | 22.26 | ||
| P/S | 3.06 | ||
| P/FCF | 32.18 | ||
| P/OCF | 15.74 | ||
| P/B | 5.74 | ||
| P/tB | 7.25 | ||
| EV/EBITDA | 14.54 |
EPS(TTM)20.67
EY4.02%
EPS(NY)23.12
Fwd EY4.49%
FCF(TTM)16
FCFY3.11%
OCF(TTM)32.7
OCFY6.35%
SpS168.25
BVpS89.68
TBVpS71
PEG (NY)N/A
PEG (5Y)1.19
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.32% | ||
| ROE | 23.27% | ||
| ROCE | 14.7% | ||
| ROIC | 9.46% | ||
| ROICexc | 10.44% | ||
| ROICexgc | 11.7% | ||
| OM | 22.89% | ||
| PM (TTM) | 12.4% | ||
| GM | 40.6% | ||
| FCFM | 9.51% |
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 Turnover0.43
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.36 | ||
| Debt/FCF | 15.31 | ||
| Debt/EBITDA | 4.55 | ||
| Cap/Depr | 207.76% | ||
| Cap/Sales | 9.93% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 70.25% | ||
| Profit Quality | 76.65% | ||
| Current Ratio | 0.94 | ||
| Quick Ratio | 0.72 | ||
| Altman-Z | 2.52 |
F-Score6
WACC9.35%
ROIC/WACC1.01
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)-37.89%
EPS 3Y10.6%
EPS 5Y20.9%
EPS Q2Q%-22.16%
EPS Next Y-24.47%
EPS Next 2Y-4.96%
EPS Next 3Y2.91%
EPS Next 5Y14.55%
Revenue 1Y (TTM)-22.29%
Revenue growth 3Y5.54%
Revenue growth 5Y5.62%
Sales Q2Q%-17.92%
Revenue Next Year-15.8%
Revenue Next 2Y-4.68%
Revenue Next 3Y-0.78%
Revenue Next 5Y8.39%
EBIT growth 1Y-30.73%
EBIT growth 3Y14.52%
EBIT growth 5Y18.01%
EBIT Next Year-9.32%
EBIT Next 3Y5.68%
EBIT Next 5Y13.77%
FCF growth 1Y109.99%
FCF growth 3Y-4.88%
FCF growth 5YN/A
OCF growth 1Y40.24%
OCF growth 3Y6.11%
OCF growth 5Y22.02%