Deere & Company (DE), Raven Industries, Inc. (RAVN): This Small Company Is a Good Long-Term Investment

Graco Inc. (NYSE:GGG) is trading at nearly $58 per share, with a total market cap of $3.5 billion. It has a valuation equivalent to Raven’s at 12.6 times EV/EBITDA. Deere & Company (NYSE:DE) is the biggest company among the three, with around $33.5 billion in total market cap. At  around $85 per share, Deere & Company (NYSE:DE) is valued at 10.5 times EV/EBITDA.

Among the three, Graco has the highest operating margin at 24.5%. Raven ranked second with 19.1%, while the operating margin of Deere & Company (NYSE:DE) is the lowest at 13.5%. However, as Graco has a much lower asset turnover than Raven, its return on invested capital is also much lower, at 16.5%. Deere & Company (NYSE:DE) has the lowest ROIC among the three, at only 7.15%. In terms of dividend yield, Deere & Company (NYSE:DE) is the winner with the highest dividend yield at 2.3%, while the dividend yields of Raven and Graco are 1.3% and 1.7%, respectively.

My Foolish take

With its growing and consistent historical performance, debt-free operation, and the highest return on invested capital, Raven seems to be a stock to hold in the long run. I personally think at its current price, the stock is fairly valued, and it is a much better buy among its peers now.

The article This Small Company Is a Good Long-Term Investment originally appeared on Fool.com and is written by Anh HOANG.

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