Deere: Dividends Since 1937

10/06/2016 7:00 am EST


Vita Nelson

Founding Publisher and Editor, Moneypaper

This featured stock - founded in 1837 -- operates through three business segments: agriculture and turf, construction and forestry, and financial services, explains Vita Nelson, editor of DirectInvesting.

Deere (DE) markets its products primarily through independent retail dealer networks and retail outlets.

With a market cap of $26.3 billion, Deere is a large cap stock; it is considered a solid and well-diversified business with wide economic moat and sustainable competitive advantage over rivals.

The firm also enjoys an outstanding corporate culture. Deere has paid dividends to investors since 1937, and has increased its payments for 12 consecutive years.

During the past 5 years it has increased its dividends at an average rate of 11.5%, and its quarterly payment of $0.60 per share currently provides a yield of 2.88%.

A hypothetical investment in Deere has grown cumulatively (including dividends reinvested) 3,351.38% during the last forty years. The same investment has grown 1,435.62% in the same period of time, excluding dividends.

DE still has room for significant dividend growth in the coming years, since the company's current dividend payout ratio, or its dividend payments as a percentage of its earnings, is only 48%.

Its p/e ratio of 16.6 is 80.35% below its industry average, making it attractive for investors with a longer-term investment horizon.

Technically, DE looks attractive, trading 13.9% below its three-year high, while it is forming a price consolidation pattern between $70 and $88 approximately.

With the stock being fundamental and technically attractive, this company is an appropriate holding for investors who have a long-term investment horizon.

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