Financial Review: Deere & Company (DE) & CNH Global (CNH)

Deere & Company (NYSE: DE) and CNH Global (NYSE:CNH) are both industrial products companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, dividends, earnings, profitability, valuation, institutional ownership and risk.

Analyst Recommendations

This is a summary of current ratings for Deere & Company and CNH Global, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Deere & Company 2 8 9 0 2.37
CNH Global 0 0 0 0 N/A

Deere & Company presently has a consensus target price of $142.10, suggesting a potential downside of 4.92%.

Profitability

This table compares Deere & Company and CNH Global’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Deere & Company 7.22% 26.31% 3.53%
CNH Global N/A N/A N/A

Dividends

Deere & Company pays an annual dividend of $2.40 per share and has a dividend yield of 1.6%. CNH Global does not pay a dividend. Deere & Company pays out 36.1% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Deere & Company and CNH Global’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Deere & Company $29.74 billion 1.61 $2.16 billion $6.64 22.51
CNH Global N/A N/A N/A $5.40 N/A

Deere & Company has higher revenue and earnings than CNH Global. CNH Global is trading at a lower price-to-earnings ratio than Deere & Company, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

67.8% of Deere & Company shares are held by institutional investors. 0.9% of Deere & Company shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Deere & Company beats CNH Global on 9 of the 10 factors compared between the two stocks.

Deere & Company Company Profile

Deere & Company is engaged in equipment operations. The Company is engaged in providing financial services. The Company operates through three business segments: agriculture and turf, construction and forestry, and financial services. The agriculture and turf segment manufactures and distributes a line of agriculture and turf equipment and related service parts. The construction and forestry segment provides a line of construction equipment, and forestry machines and attachments available in the world. The construction and forestry segment is also engaged in providing fleet management telematics solutions. The financial services segment primarily finances sales and leases by the Company dealers of new and used agriculture and turf equipment and construction and forestry equipment. The financial services segment also provides wholesale financing to dealers of the foregoing equipment, finances retail revolving charge accounts and offers extended equipment warranties.

CNH Global Company Profile

CNH Global N.V. (CNH) is a global, full-line company in both the agricultural and construction equipment industries. The Company organizes its operations into three business segments: agricultural equipment, construction equipment and financial services. The Company markets its products globally through its two brand families, Case and New Holland. Case IH (along with Steyr in Europe) and New Holland make up its agricultural brand family. Case and New Holland Construction (along with Kobelco in North America) make up its construction equipment brand family. During the year ended December 31, 2012, the Company was manufacturing its products in 37 facilities globally and distributing its products in approximately 170 countries through a network of approximately 11,500 dealers and distributors.

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