Deere and Company is a company based in the United States. The company designs, manufactures, and sells farming and other infrastructure equipment around the world. The company makes products like tractors, harvesting attachments, and many others. The company also offers maintenance and other financial services for its machines. The company was founded in 1837.
Why You Should?
- Deere and Company is a great reopening play in an investor’s portfolio. The company has been hurt by the pandemic as its customers (farmers) faced hardship through this pandemic as the demand for food fell. Other supply chain issues also hurt the company. However, once this pandemic is over, the company will continue to grow.
- Deere and Company is an extremely safe investment option due to the essential nature of the products that it provides to customers and governments around the world. Without the tractors and other equipment that Deere offered, it would be much harder to produce food and other infrastructure around the world. This will help the company bounce back from tough times.
- A Biden administration will positively benefit the company. Biden currently looks to spend trillions of dollars in infrastructure, something that will benefit the company. He will also reduce trade tensions between the United States and other countries, something that will allow Deere to see lower tariffs and more international sales. This will benefit the company and investors.
- Food commodities (like corn, wheat, soybeans) fell during the pandemic as demand went down. However, these commodities skyrocketed during this reopening play, something which will allow farmers to sell their crops for more money. This means that they can purchase equipment from companies like Deere with some of the profits that they got.
- Deere offers a wide range of products and services. From small tractors and attachments to some of the largest farming and infrastructure equipment in the world, the company serves most of its customer’s needs. The company also offers maintenance services, something that offers recurring revenue streams. This will benefit the company and its investors.
Why You Should Not?
- The company faces tough competition in the farming and infrastructure equipment industry. Some of these competitors include Komatsu, Caterpillar, and many others. This competition might hurt the company and its investors.
- The COVID-19 pandemic has had adverse impacts on Deere. From farmers not purchasing equipment due to uncertainty and supply chain issues like the semiconductor shortage, the company has had its operations during 2020 negatively impacted. This has hurt the company and its investors.
I think that Deere and Company is a great long-term investment due to its position as a good reopening play, positive impacts from a Biden administration, its position as a safe investment option, rising commodity costs, and its wide range of products and investors. However, tough competition and negative impacts from the pandemic might hurt the company and its investors in the future.