Yahoo Finance If You Invested $1000 in Deere a Decade Ago, This is How Much It'd Be Worth Now
How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Deere (DE) ten years ago? It may not have been easy to hold on to DE for all that time, but if you did, how much would your investment be worth today?
Deere's Business In-Depth
With that in mind, let's take a look at Deere's main business drivers.
Illinois-based Deere is the world’s largest producer of agricultural equipment, manufacturing agricultural machinery since 1837 under the iconic John Deere brand with its signature green and yellow color scheme. It is the 71st-largest company in the S&P 500 Index with a market capitalization of around $121 billion. It has an advantage in most farm machinery categories as its machines come with advanced features and are better constructed than its competitors. Deere is currently the world leader in precision agriculture and remains focused on revolutionizing agriculture with technology, in an effort to make farming automated, easier and more precise across the production process.
Beginning fiscal 2021, the company has four reportable segments. Agriculture and turf operations had been divided into two new segments:
The Production and Precision Agriculture segment (46% of equipment revenues in fiscal 2022) is responsible for defining, developing, and delivering global equipment and technology solutions that cater to production-scale growers of large grains, small grains, cotton, and sugar. Primary products include large and certain mid-size tractors, combines, cotton pickers, sugarcane harvesters and loaders, and soil preparation, seeding, application and crop care equipment.
The Small Agriculture and Turf segment (28% of equipment revenues in fiscal 2022) will deliver products to support mid-size and small growers and producers globally, and turf customers. It will cater to production systems for dairy and livestock, high-value crops, and turf and utility operators. Products include certain mid-size and small tractors, and hay and forage equipment, riding and commercial lawn equipment, golf course equipment, and utility vehicles.
The Construction and Forestry (26% of equipment revenues in fiscal 2022) segment manufactures machines and service parts used in construction, earthmoving, material handling and timber harvesting. Deere also manufactures and distributes road building equipment through its wholly-owned subsidiaries of the Wirtgen Group.
Deere also finances sales and leases for new and used equipment through its Financial Services segment, which generated 8% of the Deere’s revenues in fiscal 2022.
Bottom Line
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Deere a decade ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in September 2013 would be worth $4,861.44, or a gain of 386.14%, as of September 19, 2023, according to our calculations. This return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 158.10% and gold's return of 35.89% over the same time frame.
Looking ahead, analysts are expecting more upside for DE.
Deere is witnessing solid growth in order levels, which is expected to aid its top-line performance in the forthcoming quarters. Strong replacement demand will continue to boost the company's results. Demand for its construction equipment will likely benefit from anticipated growth in infrastructural investments in the United States. However, inflated material and labor costs are anticipated to impact the company's margins. Supply chain challenges also remain a woe. Nonetheless, the company's efforts to improve pricing will somewhat help offset these headwinds. Product launches equipped with the latest technology to make farming automated will continue to provide Deere with an edge over its competitors. The company is poised to benefit in the long run from rapid growth in the global population and rising worldwide infrastructure needs.
Shares have gained 5.13% over the past four weeks and there have been 12 higher earnings estimate revisions for fiscal 2023 compared to none lower. The consensus estimate has moved up as well.
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