Earnings Report Proves Why Deere &...
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Jonathan Yates
Earnings Report Proves Why Deere & Co. is for the Long Term Investor

Reporting its third quarter earnings this week, Deere & Co. (NYSE: DE) certainly proved why it is for the long term investor!

Deere & Co. beat the estimates of Wall Street with its third quarter results.  But the stock actually fell due to the negative outlook for its overall sector.  For the last quarter, Deere & Co, is down more than 5%.

But, as the chart below shows, it has been a very bumpy ride for the shareholders of Deere & Co.  Even though the Dow Jones Industrial Average (NYSE: DIA) fell more than 200 points the day after Deere & Co. reported its earnings, the stock price actually rose by more than $2, over 2%.

Deere & Co. has a beta of 1.57.  As the beta for the stock market as a whole is 1, that means that Deere & Co. is almost 60% as volatile as the market. Such is the nature of stocks trading in the agriculture sector.  As an example, Caterpillar (NYSE: CAT), the farming equipment maker that is a member of the Dow Jones Industrial Average, has a beta of 1.90.

For the long term investor, that presents tremendous opportunities to buy shares of great publicly traded companies like Deere & Co. and Caterpillar at discounts on the dips.  As each offers a strong dividend yield, buying low results in a higher income stream.  The performance of Deere & Co. this week certainly showed why it is a stock for the long term investor!

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