Previous articles on this site have been bullish on equipment makers such as Caterpillar (NYSE: CAT), Deere & Co. (NYSE: DE), and Joy Global (NYSE: JOY).
Deere continues to be appealing to growth, value, and income investors.
The global economy pulling out of The Great Recession has been good to Caterpillar, Joy Global, and Deere. Caterpillar has been particularly strong, up more than 25 percent. Joy Global is a double digit gainer, too. Deere is down in the short term but looks good for the long term (chart below).
Growth investors should be especially interested.
The price-to-earnings ratio for Deere & Co. is projected to say around 11. That is very bullish. It prices earnings grow very low for Deere & Co. By contrast, the price-to-earnings ratio for Caterpillar is almost 19!
Value investors have much to like about Deere & Co., too,
The price-to-sales ratio for Deere & Co. is 0.86. That means that each dollar of sales is priced at 86 cents. That is nearly a 15 percent discount in the sales. The price-to-earnings ratio is also robust at 34.80 percent. Legendary investor Warren Buffett favors companies with a return-on-equity of at least 20 percent. Warren Buffett is the ultimate value investor, which shows the appeal of Deere & Co.
Deere & Co. also has much to offer to income investors in the form a quarterly check in the mail!
At present, the average dividend yield for a member of the Standard & Poor’s 500 Index is around 1.8 percent. The dividend yield for Deere & Co. is over 2. 7 percent. As an income stock, it does not come much better than Deere & Co.
In addition to the micro appeal of Deer & Co., the macro environment is also positive.
China and India are implementing pro-growth policies. That requires more equipment from Deere & Co. and others. This makes Deere & Co. a great candidate for writing covered put and call options. Dr. Joseph Louro, an options expert and head of InvestView (OTC: INVU), points out that this is a particularly profitable low risk strategy as most options expire unexercised!
For growth, value, and income investors, Deere & Co. continues to be appealing!
