Nothing Runs Like a Deere & Company (DE): CNH Global NV (CNH), AGCO Corporation (AGCO)

Growth of the Dividend

Deere currently pays out a $1.84 annual dividend, representing a yield of about 2.10%. Most importantly, they have raised this dividend five times since 2010. This shows that management is dedicated to returning value to its shareholders. The dividend was already raised by 11% earlier this year, but I think another increase could occur in the fourth quarter due to the strong earnings growth that is expected.

Other Players in the Industry

CNH Global NV (NYSE:CNH) is a worldwide manufacturer of agricultural and construction equipment. They have seen a steady rise in earnings since 2010 and analysts expect a slow but continued growth through 2014. Annual earnings for 2012 were reported on Jan. 31, and they came in at $4.83, a 26.4% increase from 2011. However, earnings per share are only expected to rise 1% in 2013 and 5.1% in 2014. CNH Global is a great company, but it does not have the growth and strength of dividend that Deere has.

AGCO Corporation (NYSE:AGCO) Corporation manufactures equipment exclusively for the agricultural industry. They too have had a steady rise in earnings and reported full year 2012 earnings on Feb. 5. Their earnings came in at $5.25 per share, a 17.2% increase from 2011. AGCO Corporation (NYSE:AGCO), like CNH Global NV (NYSE:CNH), sees slowed growth in 2013 and analysts expect an earnings increase of just 1.3%. They do pay a dividend of $0.40 annually, or 0.74%, but this is not nearly large enough to entice dividend investors. In a comparison, Deere & Company (NYSE:DE) takes the cake in this matchup.

The Foolish Bottom Line

Deere is a great American company, founded over 175 years ago, with growth and a good yield. At current levels, the opportunity and potential is there. The market has hit all time highs for several days in a row, so I am personally waiting for a pullback to add a position in this company. Deere is the kind of company to buy and hold for 25 years.

The article Nothing Runs Like a Deere originally appeared on Fool.com and is written by Joseph Solitro.

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