Monsanto Company (MON)’s Growing Yields

Conclusions

As seen above, Monsanto’s revenue growth history is solid and future growth prospects remain strong. Additionally, operating expenses are growing slower than sales, creating positive earnings leverage. Last, the company enjoys a strong cash to debt position. The cash position provides essential research and development opportunities along with stability in the cyclical agriculture business.

Evidence of the strength of the balance sheet can be seen when compared to agriculture sector mainstay Potash Corp./Saskatchewan (USA) (NYSE:POT) (see chart below). But it is not just the noted cash difference, Potash Corp./Saskatchewan (USA) (NYSE:POT) has five of its seven major debt issues due between 2014 and 2020. It will be interesting to see at what rates this debt will reissue.

Monsanto’s dividend is growing and sustainable because of their balance sheet. The company is aggressively increasing its share repurchases. Taking the aforementioned growth and increasing shareholder friendliness, Monsanto can be bought on a pull back under $100.

Source: finance.yahoo.com

The article Monsanto’s Growing Yields originally appeared on Fool.com.

John Miller has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. John is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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