Deere & Co's Dividend Analysis
An In-Depth Look at the Upcoming Dividend Payout and Company Fundamentals
Deere & Co (NYSE:DE) recently announced a dividend of $1.47 per share, payable on 2024-05-08, with the ex-dividend date set for 2024-03-27. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Deere & Co's dividend performance and assess its sustainability.
What Does Deere & Co Do?
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Deere & Co is the world's leading manufacturer of agricultural equipment, producing some of the most recognizable machines in the heavy machinery industry. The company is divided into four reportable segments: production and precision agriculture, small agriculture and turf, construction and forestry, and John Deere Capital. Its products are available through an extensive dealer network, which includes over 2,000 dealer locations in North America and approximately 3,700 locations globally. John Deere Capital provides retail financing for machinery to its customers, in addition to wholesale financing for dealers, which increases the likelihood of Deere product sales.
A Glimpse at Deere & Co's Dividend History
Deere & Co has maintained a consistent dividend payment record since 1985, with dividends currently distributed on a quarterly basis. The company has increased its dividend each year since 1987, earning it the prestigious status of a dividend aristocrat. This recognition is reserved for companies that have consistently raised their dividends for at least 25 consecutive years.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Deere & Co's Dividend Yield and Growth
As of today, Deere & Co currently has a 12-month trailing dividend yield of 1.33% and a 12-month forward dividend yield of 1.47%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Deere & Co's annual dividend growth rate was 18.40%. This rate decreased to 14.10% per year when extended to a five-year horizon. Over the past decade, Deere & Co's annual dividends per share growth rate stands at 8.80%. Based on Deere & Co's dividend yield and five-year growth rate, the 5-year yield on cost of Deere & Co stock as of today is approximately 2.57%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. As of 2024-01-31, Deere & Co's dividend payout ratio is 0.15, indicating a conservative approach to dividend distribution that allows for reinvestment in the company and cushions against downturns. Deere & Co's profitability rank of 8 out of 10 suggests good profitability prospects, with a consistent track record of positive net income over the past decade.
Growth Metrics: The Future Outlook
Deere & Co's robust growth metrics are essential for the sustainability of dividends. The company's growth rank of 8 out of 10 suggests a good growth trajectory compared to its competitors. Deere & Co's strong revenue model is reflected in its revenue per share and 3-year revenue growth rate, which has increased by approximately 23.20% per year on average, outperforming 86.63% of global competitors. Its impressive 3-year EPS growth rate of 60.30% per year on average, and 5-year EBITDA growth rate of 37.90%, further solidify Deere & Co's position as a strong performer relative to its global competitors.
Next Steps
In conclusion, Deere & Co's upcoming dividend, consistent dividend growth rate, prudent payout ratio, strong profitability, and robust growth metrics paint a promising picture for current and prospective investors. These factors collectively suggest a sustainable dividend strategy that aligns with the company's financial health and growth prospects. Investors seeking to diversify their portfolios with dividend-paying stocks should consider the stability and growth potential that Deere & Co offers. Is Deere & Co poised to continue its legacy as a dividend aristocrat in the years to come? This is a question value investors might ponder as they assess the company's fundamentals and future outlook.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
