Deere and Company is a company based in the United States. The company designs, manufactures, and sells farming equipment around the world. The company makes equipment and attachments which help farms and customers with agriculture, turf, and construction needs. In addition to this, the company offers maintenance and financial services needed for these products. The company was founded in 1837.
Why You Should?
- Deere and Company is a great reopening play in an investor’s portfolio. The company was hurt by the pandemic as it increased uncertainty and hurt farmers around the world. Once this pandemic is over, the demand for agriculture and construction products will increase once again. This will benefit the company and its investors.
- Deere and Company has also been innovating for the future of the agriculture and construction industry. These improved products and services will attract customers to the company as they look for efficient machines and methods as well. This will benefit the company and its investors in the future.
- A Biden administration will benefit the company. From lower material costs and higher machine sales due to the lowering of trade tensions around the world. Farmers and contractors will have more money to work on more projects. This is what will cause a rise in the demand for the company’s products and services. This will benefit the company and its investors in the future.
- Deere and Company has reported rising revenues and profits due to the reasons mentioned above. This growth has stopped due to the pandemic but will continue once the company emerges from this public health crisis. This will also benefit investors in the future. In the financial year of 2019, the company reported revenues of around 39.23 billion and profits of around 3.25 billion. Both of these metrics were higher than what the company reported in the financial year of 2018 when they had revenues of around 37.32 billion and profits of around 2.37 billion. However, in the financial year of 2020, the company reported a drop in both revenues of profits due to the pandemic. In this year, the company reported revenues of around 35.51 billion and profits of around 2.75 billion. The company will return to growth in the short to mid-term.
Why You Should Not?
- Deere and Company faces tough competition from many other large equipment companies around the world. Some of these companies include Caterpillar, CNH, and Kubota. Though not all of these companies are listed on the U.S. stock market, investors should know about these competitors.
- Deere and Company’s stock price has soared to record levels. Now, given the rising interest rates in the United States, Deere and Company might see its stock price fall. I would wait for the stock price to move downward before investing in this great company.
- Deere and Company has been negatively impacted because of the pandemic. Farmers and contractors saw a drop in demand for some of their goods and services as the pandemic went on. Uncertainty also caused a drop in sales for the company. However, these impacts are only short to mid-term issues and the company will return to growth in the future.
I think that Deere and Company is a good long-term investment due to its position as a good reopening play, its innovations which will set the company up for future growth, positive impacts from a Biden administration, and its history of strong financial performance. However, tough competition, a record stock price, and impacts from the pandemic might hurt the company and its investors.