Here’s How Much You Would Have Had If You Invested $1,000 In Deere Ten Years Ago
For most investors, the evolution of a stock’s price over time is important. This factor can impact your investment portfolio and help you compare investment results across sectors and industries.
Another factor that can sway investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you had invested in Deere (DE) ten years ago? It may not have been easy to hold on to DE all this time, but if it was, how much would your investment be worth today?
Deere business in depth
With that in mind, let’s take a look at Deere’s top business engines.
Illinois-based Deere is the world’s largest producer of farm equipment, manufacturing farm machinery since 1837 under the iconic John Deere brand with its green and yellow color scheme. It is the 70th largest company in the S&P 500 index with a market capitalization of around $109 billion. It has an edge in most agricultural machinery categories because its machines come with advanced features and are better built than its competitors. Deere is currently the world leader in precision farming and remains focused on revolutionizing farming with technology, with the goal of making farming automated, easier and more precise throughout the production process.
As of fiscal 2021, the company has four reportable segments. The agriculture and turf business, which generated approximately 63% of Deere’s revenue in fiscal 2020, has been split into two new segments:
the Production and precision agriculture The segment is responsible for defining, developing and delivering global technology equipment and solutions that cater to large-scale producers of large grains, small grains, cotton and sugar. The main products include large and some medium-sized tractors, combine harvesters, cotton pickers, sugar cane harvesters and loaders, as well as land preparation, seeding, application and crop maintenance.
the Small farming and turf will provide products to support medium and small-scale growers and growers globally, as well as turf customers. It will address production systems for dairy and livestock, high value crops, and turf and utility operators. Products include select medium and small tractors, as well as hay and forage equipment, riding and commercial turf equipment, golf course equipment and utility vehicles.
the Construction and forestry (25% of fiscal 2020 revenue) manufactures machinery and spare parts used in construction, earthmoving, timber handling and harvesting. Deere also manufactures and distributes road construction equipment through its wholly owned subsidiaries of the Wirtgen Group.
Deere also finances sales and leases of new and used equipment through its Financial services segment, which generated 10% of Deere’s revenue in fiscal 2021.
Building a successful investment portfolio requires a combination of research, patience and a bit of risk. For Deere, if you bought stocks ten years ago, you’re probably feeling great about your investment today.
A $1,000 investment made in March 2011 would be worth $4,269.73, a gain of 326.97%, as of March 16, 2021, according to our calculations. This return excludes dividends but includes price appreciation.
By comparison, the S&P 500 gained 209.62% and the price of gold rose 19.05% over the same period.
Going forward, analysts expect more upside for DE.
Deere’s earnings and revenue in the first quarter of fiscal 2021 improved year-over-year and topped Zacks’ respective consensus estimate. Supported by improving conditions in the agriculture and construction sectors, the company expects net income for fiscal 2021 of between $4.6 billion and $5 billion. The midpoint of the range suggests a 75% year-over-year improvement. The rise in commodity prices bodes well for demand for agricultural equipment. Additionally, replacement demand triggered by the need to replace old equipment will continue to drive revenue. The construction and forestry segment will benefit from the strong demand from the housing market. Deere’s focus on investing in new products with advanced technologies gives it a competitive edge. Additionally, expansion efforts in precision agriculture will drive long-term growth.
The stock is up 18.05% in the past four weeks, and no earnings estimate has fallen in the past two months, compared to 11 more for fiscal 2021. The consensus estimate also rose .
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