In This Article:
Understanding the Dividend Dynamics of Deere & Co
Deere & Co (NYSE:DE) recently announced a dividend of $1.47 per share, payable on 2024-02-08, with the ex-dividend date set for 2023-12-28. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Deere & Co's dividend performance and assess its sustainability.
What Does Deere & Co Do?
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Deere & Co is the world's leading manufacturer of agricultural equipment, producing some of the most recognizable machines in the heavy machinery industry. The company is divided into four reportable segments: production and precision agriculture, small agriculture and turf, construction and forestry, and John Deere Capital. Its products are available through an extensive dealer network, which includes over 2,000 dealer locations in North America and approximately 3,700 locations globally. John Deere Capital provides retail financing for machinery to its customers, in addition to wholesale financing for dealers, which increases the likelihood of Deere product sales.
A Glimpse at Deere & Co's Dividend History
Deere & Co has maintained a consistent dividend payment record since 1985, with dividends currently distributed on a quarterly basis. Deere & Co has increased its dividend each year since 1987, earning the prestigious title of a dividend aristocrat, a recognition given to companies that have consistently increased their dividends for at least 36 years. Below is a chart showing the historical trends of Deere & Co's annual Dividends Per Share.
Breaking Down Deere & Co's Dividend Yield and Growth
As of today, Deere & Co currently has a 12-month trailing dividend yield of 1.27% and a 12-month forward dividend yield of 1.48%, suggesting an expectation of increased dividend payments over the next 12 months. Over the past three years, Deere & Co's annual dividend growth rate was 18.40%. Extended to a five-year horizon, this rate decreased to 14.10% per year, and over the past decade, the annual dividends per share growth rate stands at 8.80%. The 5-year yield on cost of Deere & Co stock as of today is approximately 2.46%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-10-31, Deere & Co's dividend payout ratio is 0.15.