Pros and Cons of Investing in DuPont

PHOTO CREDIT: DuPont

OVERVIEW

DuPont de Nemours Incorporation is a company based in the United States. The company designs develop, manufactures, and sells chemical products and technology around the world. The company manufactures chemicals found in plastics, paints, energy, aerospace, and many other products. The company was founded in 1897.

Why You Should?

  1. DuPont Incorporation is a great reopening play in an investor’s portfolio. The company saw a drop in sales volumes as industrial and commercial companies around the world shut down due to the pandemic. However, once this pandemic is over, the company will see a rise in demand as these companies return to work and use chemicals
  2. The company will see some positive impacts from the Biden administration. Biden will look to sign massive trade deals with our allies, something that will give DuPont an opportunity to sell more of its chemicals internationally. More infrastructure and defense spending will also benefit the company and its investors.
  3. The company sells a wide range of products and services to its customers around the world. Its chemicals are used in paints, plastics, solar panels, and many more products. This diverse portfolio of products will help the company gain new customers and retain others for a longer period of time. This will help the company grow its business and will benefit investors.

Why You Should Not?

  1. The company faces tough competition in the chemicals industry. Some of these competitors include Dow, Monsanto, PPG, and FMC. This competition might hurt the company and its investors in the future.
  2. The company has been negatively impacted by the pandemic. Many industrial and commercial companies that manufacture products using DuPont’s chemicals saw a drop in demand for their products. This caused DuPont to see lower sales volumes for their chemicals. Supply chain issues also hurt the company during this time. This hurt the company and its investors.
  3. The company also faces a negative political environment. Biden and the Democrats will look to increase environmental regulation and policies in order to fight climate change and pollution. This means that the company will need to pay higher fees and taxes and many need to adjust how they operate in order to follow these new regulations.

MY OPINION

I think that DuPont is a decent long-term investment due to its position as a good reopening play, a wide range of products, as well as positive impacts from the Biden administration. However, tough competition, negative impacts from the pandemic, as well as a negative political environment might hurt the company and its investors in the future.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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