June 03, 2025 a 02:46 am
Dividend Analysis - Deere & Company
Deere & Company is known for its robust dividend history and moderate growth over the years. With a consistent dividend payout for over five decades, Deere sits at a respectable dividend yield of 1.25%. Despite a relatively low yield compared to other dividend stocks, the company's solid financial health supports continuous dividend payments.
📊 Overview
| Metric | Details |
|---|---|
| Sector | Industrials |
| Dividend yield | 1.25% |
| Current dividend per share | $5.82 |
| Dividend history | 54 years |
| Last cut or suspension | None |
🗣️ Dividend History
The dividend history is a testament to Deere & Company's steadfast commitment to returning value to shareholders. Consistency over 54 years showcases the company's dedication to maintaining shareholder trust.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 3.24 |
| 2024 | 6.03 |
| 2023 | 5.32 |
| 2022 | 4.51 |
| 2021 | 3.90 |
📈 Dividend Growth
Dividend growth is a strong indicator of a company’s earnings stability and consistent profitability. Deere & Company's dividend growth over the recent years is indicative of its strong market position and fiscal management.
| Time | Growth |
|---|---|
| 3 years | 15.63% |
| 5 years | 14.68% |
The average dividend growth is 14.68% over 5 years. This shows moderate but steady dividend growth.
✅ Payout Ratio
The payout ratio reflects the proportion of earnings and free cash flow distributed as dividends. A lower ratio generally indicates more room for distribution increases in the future.
| Key Figure | Ratio |
|---|---|
| EPS-based | 25.40% |
| Free cash flow-based | 37.23% |
With an EPS payout ratio of 25.40% and a free cash flow payout ratio of 37.23%, Deere & Company maintains a healthy balance between rewarding shareholders and retaining capital for future growth.
⚠️ Cashflow & Capital Efficiency
Understanding cashflow and capital efficiency is crucial as it reflects how well a company can cover its operational costs and generate profits from its assets.
| Metrics | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 3.89% | 3.83% | 0.76% |
| Earnings Yield | 6.24% | 9.46% | 5.92% |
| CAPEX to Operating Cash Flow | 52.02% | 52.02% | 80.61% |
| Stock-based Compensation to Revenue | 0.41% | 0.22% | 0.17% |
| Free Cash Flow / Operating Cash Flow Ratio | 47.98% | 47.98% | 19.39% |
The financial ratios indicate substantial reinvestment in business operations and stable cash flow returns relative to operating cash flows, suggesting strategic capital allocation.
Balance Sheet & Leverage Analysis
The balance sheet provides insight into the financial stability and leverage employed by the company. Effective management of leverage ensures sustainable operation and growth.
| Metrics | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 2.87 | 2.92 | 2.58 |
| Debt-to-Assets | 61.00% | 61.19% | 57.98% |
| Debt-to-Capital | 74.14% | 74.51% | 72.04% |
| Net Debt to EBITDA | 3.96 | 3.22 | 3.92 |
| Current Ratio | 2.13 | 1.96 | 2.02 |
| Quick Ratio | 1.94 | 1.75 | 1.75 |
| Financial Leverage | 4.70 | 4.78 | 4.44 |
Analysis reveals Deere & Company has maintained relatively high leverage ratios, which could translate into increased risks if not managed correctly; however, their liquidity ratios remain solid, suggesting efficient short-term financial management.
Fundamental Strength & Profitability
Fundamental strength metrics like returns and margins reflect the company's ability to generate profit from operations and retain competitive advantages over time.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 31.09% | 46.67% | 35.19% |
| Return on Assets | 6.62% | 9.77% | 7.92% |
| Return on Invested Capital | 9.48% | 12.58% | 9.15% |
| Net Margin | 14.05% | 16.87% | 13.91% |
| EBIT Margin | 24.85% | 25.68% | 19.87% |
| EBITDA Margin | 29.04% | 29.01% | 23.56% |
| Gross Margin | 38.59% | 37.02% | 30.67% |
| R&D to Revenue | 4.53% | 3.61% | 3.73% |
The metrics suggest robust profitability and strategic reinvestment in R&D which indicates Deere’s commitment towards innovation and sustainable competitive advantages.
Price Development
Dividend Scoring System
| Criterion | Rating | Score |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 5 | |
| Dividend Growth | 4 | |
| Payout Ratio | 5 | |
| Financial Stability | 4 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 3 | |
| Balance Sheet Quality | 4 |
Total Score: 33/40
Rating
Deere & Company demonstrates robust dividend stability and financial performance, making it an appealing pick for conservative, income-focused investors. However, its relatively low yield necessitates prospective investors to balance yield with growth potential. The company's strong reinvestment in innovation and strategic capital allocation supports future operational sustainability. Recommended for long-term dividend growth portfolios.