Buy or Sell John Deere Stock Today?
John Deere (NYSE: DE) is a $37 billion company today. Investors that bought shares one year ago are sitting on a 39.65% total return. That's above the S&P 500's return of 17.6%.
John Deere stock is beating the market, and it reports earnings tomorrow. But does that make it a good buy today? To answer this question, we've turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.
Our system looks at six key metrics...
✗ Earnings-per-Share (EPS) Growth: John Deere reported a recent EPS growth rate of -23.75%. That's below the machinery industry average of 58.99%. That's not a good sign. We like to see companies that have higher earnings growth.
✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the machinery industry is 27.59. And John Deere's ratio comes in at 24.59. It's trading at a better value than many of its competitors.
✗ Debt-to-Equity : The debt-to-equity ratio for John Deere stock is 504.82%. That's above the machinery industry average of 97.88%. That's not a good sign. John Deere's debt levels should be lower.
✓ Free Cash Flow per Share Growth : John Deere's FCF has been higher than that of its competitors over the last year. That's good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It's one of our most important fundamental factors.
✗ Profit Margins : The profit margin of John Deere comes in at 3.45% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. John Deere's profit margin is below the machinery average of 8.7%. So that's a negative indicator for investors.
✓ Return on Equity : Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for John Deere is 21.81%, and that's above its industry average ROE of 16.73%.
John Deere stock passes three of our six key metrics today. That's why our Investment U Stock Grader rates it as a Hold.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That's why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth. For more details, click here.