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Deere Graham Number

: $133.17 (As of Jan. 2022)
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Graham Number is a figure that measures a stock's fundamental value by taking into account the company's earnings per share and book value per share. The Graham number is the upper bound of the price range that a defensive investor should pay for the stock. According to the theory, any stock price below the Graham number is considered undervalued, and thus worth investing in.

As of today (2022-05-18), the stock price of Deere is $371.595. Deere's graham number for the quarter that ended in Jan. 2022 was $133.17. Therefore, Deere's Price to Graham Number ratio for today is 2.79.

The historical rank and industry rank for Deere's Graham Number or its related term are showing as below:

DE' s Price-to-Graham-Number Range Over the Past 10 Years
Min: 0.6   Med: 1.62   Max: 10.84
Current: 2.79

During the past 13 years, the highest Price to Graham Number ratio of Deere was 10.84. The lowest was 0.60. And the median was 1.62.

DE's Price-to-Graham-Number is ranked worse than
88.19% of 144 companies
in the Farm & Heavy Construction Machinery industry
Industry Median: 1.06 vs DE: 2.79

Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.


Deere Graham Number Historical Data

The historical data trend for Deere's Graham Number can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Deere Annual Data
Trend Oct12 Oct13 Oct14 Oct15 Oct16 Oct17 Oct18 Oct19 Oct20 Oct21
Graham Number
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 62.28 58.21 72.04 72.92 138.67

Deere Quarterly Data
Apr17 Jul17 Oct17 Jan18 Apr18 Jul18 Oct18 Jan19 Apr19 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22
Graham Number Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 86.59 105.29 119.05 138.67 133.17

Competitive Comparison

For the Farm & Heavy Construction Machinery subindustry, Deere's Graham Number, along with its competitors' market caps and Graham Number data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Deere Graham Number Distribution

For the Farm & Heavy Construction Machinery industry and Industrials sector, Deere's Graham Number distribution charts can be found below:

* The bar in red indicates where Deere's Graham Number falls into.



Deere Graham Number Calculation

Graham Number is a concept based on Ben Graham's conservative valuation of companies.

Deere's Graham Number for the fiscal year that ended in Oct. 2021 is calculated as

Graham Number
=sqrt of (22.5* Tangible Book per Share *EPS without NRI)
=sqrt of (22.5*45.007*18.99)
=138.67

Deere's Graham Number for the quarter that ended in Jan. 2022 is calculated as

Graham Number
=sqrt of (22.5*Tangible Book per Share*EPS without NRI (TTM))
=sqrt of (22.5*43.689*18.04)
=133.17

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Deere  (NYSE:DE) Graham Number Explanation

Ben Graham actually did not publish a formula like this. But he wrote in The Intelligent Investor (1948 version) regarding to the criteria for purchases:

Current price should not be more than 15 times average earnings of the past three years.

Current price should not be more than 1.5 times the book value last reported. However, a multiplier of earnings below 15 could justify a correspondingly higher multiplier of assets. As a rule of thumb we suggest that the product of the multiplier times the ratio of price to book value should not exceed 22.5. (This figure corresponds to 15 times earnings and 1.5 times book value. It would admit an issue selling at only 9 times earnings and 2.5 times asset value, etc.)

Unlike valuation methods such as DCF or Discounted Earnings, the Graham number does not take growth into the valuation. Unlike the valuation methods based on book value alone, it takes into account the earnings power. Therefore, the Graham Number is a combination of asset valuation and earnings power valuation.

In general, the Graham number is a very conservative way of valuing a stock. It cannot be applied to companies with negative book values.

Deere's Price to Graham number Ratio for today is calculated as

Price to Graham number=Share Price (Today)/Graham number (Q: Jan. 2022 )
=371.595/133.17
=2.79

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Please keep these in mind:

1. Graham Number does not take growth into account. Therefore it underestimates the values of the companies that have good earnings growth. We feel that if the earnings per share grows more than 10% a year, Graham Number underestimates the value.
2. Graham Number punishes the companies that have temporarily low earnings. Therefore, an average of earnings makes more sense in the calculation of Graham Number.
3. Graham Numbers underestimates companies that are light with book.


Deere Graham Number Related Terms

Thank you for viewing the detailed overview of Deere's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.


Deere Business Description

Deere logo
Industry
Address
One John Deere Place, Moline, IL, USA, 61265
Deere is the world's leading manufacturer of agricultural equipment, producing some of the most recognizable machines in the heavy machinery industry. The company is divided into four reportable segments: production and precision agriculture, small agriculture and turf, construction and forestry, and John Deere Capital. Its products are available through a robust dealer network, which includes over 1,900 dealer locations in North America and approximately 3,700 locations globally. John Deere Capital provides retail financing for machinery to its customers, in addition to wholesale financing for dealers, which increases the likelihood of Deere product sales.
Executives
Howze Marc A officer: Group Pres., Life Sol & CAO DEERE & COMPANY ONE JOHN DEERE PLACE MOLINE IL 61265
Reed Cory J officer: Pres, Ag & Turf Prod & Prec Ag DEERE & COMPANY ONE JOHN DEERE PLACE MOLINE IL 61265
Von Pentz Markwart officer: PresAg Turf Small Ag & Turf DEERE & COMPANY ONE JOHN DEERE PLACE MOLINE IL 61265
Kalathur Rajesh officer: President, JD Financial & CIO DEERE & COMPANY ONE JOHN DEERE PLACE MOLINE IL 61265
Stone John H officer: Pres., WW Const & For & Pow Sy ONE JOHN DEERE PLACE MOLINE IL 61265
Field James M. officer: Pres., C&F Division DEERE & COMPANY ONE JOHN DEERE PLACE MOLINE IL 61265
Erwin Tami A. director 1095 AVENUE OF THE AMERICAS NEW YORK NY 10036
Holliday Charles O Jr director 1007 MARKET ST WILMINGTON DE 19898
Jones Clayton M director 400 COLLINS ROAD NE CEDAR RAPIDS IA 52498
Smith Sherry M director PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: SMITH SHERRY M a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Page Gregory R director EATON CENTER 1111 SUPERIOR AVENUE CLEVELAND OH 44114
Heuberger Alan Cletus director 2365 CARILLON POINT KIRKLAND WA 98033
Talton Sheila director C/O ACCO BRANDS CORPORATION 300 TOWER PARKWAY LINCOLNSHIRE IL 60201
Jain Dipak C director 130 EAST RANDOLPH DRIVE CHICAGO IL 60601
Stockton Dmitri L director 777 LONG RIDGE ROAD SYNCHRONY FINANCIAL C/O CORP. SECRETARY STAMFORD CT 06902

Deere Headlines

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