Deere & Company

Methodology

Deere's agricultural and construction equipment business exhibits significant earnings cyclicality tied to crop prices, farm income, and infrastructure spending. The company's financial services arm and parts business provide partial earnings stability. Fair value calculations work best using normalized mid-cycle assumptions for equipment demand rather than peak or trough farm profitability conditions.

Methodology

Deere's PEG ratio varies widely depending on agricultural cycle positioning and expectations for technology-driven margin expansion. The company's precision agriculture and autonomy initiatives support premium valuations to traditional equipment makers. PEG can mislead when commodity-driven equipment demand spikes temporarily boost earnings growth rates.

Methodology

Deere pays a modest dividend with long-term growth history, making PEGY somewhat more attractive than PEG for this cyclical industrial. The company maintains conservative payout ratios to preserve dividend sustainability through agricultural downturns. Total return benefits from steady yield component that provides stability during the inevitable farm economy cyclicality.