Deere Ramps Up Quarterly Dividend By 18%

Deere hiked its quarterly common stock dividend by 18% to $0.90 per share. Shares of the manufacturing company spiked almost 2.5% to close at $345.66 on Feb. 24.

Deere (DE) announced that the new dividend will be paid on May 10, to shareholders of record as of March 31.

The company’s annual dividend of $3.60 per share now reflects a dividend yield of 1.04%.

Deere CEO John C. May said, “The dividend increase is a reflection of Deere’s recent strong performance and it shows our confidence in the company’s future direction.”

Last week, Deere reported fiscal first-quarter results. The company’s 1Q earnings more than doubled to $3.87 per share on a year-over-year basis and beat the Street estimates of $2.14 per share. Revenues jumped 19% to $9.1 billion and surpassed the consensus estimate of $7.21 billion. For fiscal 2021, the company projects net income to be in the range of $4.6 billion to $5 billion. (See Deere stock analysis on TipRanks)

On Feb. 23, Merrill Lynch analyst Ross Gilardi increased the stock’s price target to $395 (14.3% upside potential) from $330 and reiterated a Buy rating “to reflect the upside revision in outlook.”

Gilardi anticipates “the market to continue looking forward to mid cycle earnings power after the breakout Ag & Turf performance in 2H’20 and expected meeting of mid cycle targets early.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 14 analysts suggesting a Buy, 3 analysts recommending a Hold, and 1 analyst suggesting a Sell. The average analyst price target of $349.94 implies 1% upside potential to current levels. Shares have increased almost 33% over the past three months.

Deere scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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