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Monsanto Co
MON : NYSE : Basic Materials
$116.19 -0.08 | -0.07%
Today's Range: 115.70 - 116.50
Avg. Daily Volume: 2,934,400
07/24/14 - 4:07 PM ET

Financial Analysis


MONSANTO CO's gross profit margin for the third quarter of its fiscal year 2014 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. MONSANTO CO has strong liquidity. Currently, the Quick Ratio is 1.76 which shows the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has increased by 5.71% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q3 FY14 Q3 FY13
Net Sales ($mil)4250.04248.0
EBITDA ($mil)1425.01390.0
EBIT ($mil)1250.01238.0
Net Income ($mil)858.0909.0


Balance Sheet Q3 FY14 Q3 FY13
Cash & Equiv. ($mil)1898.03064.0
Total Assets ($mil)23281.021679.0
Total Debt ($mil)3211.02223.0
Equity ($mil)14662.013869.0


Profitability Q3 FY14 Q3 FY13
Gross Profit Margin58.9656.83
EBITDA Margin33.5232.72
Operating Margin29.4129.14
Sales Turnover0.660.68
Return on Assets11.3611.54
Return on Equity17.9617.95
Debt Q3 FY14 Q3 FY13
Current Ratio2.862.92
Debt/Capital0.180.14
Interest Expense48.042.0
Interest Coverage26.0429.48


Share Data Q3 FY14 Q3 FY13
Shares outstanding (mil)524.39533.79
Div / share0.430.38
EPS1.621.68
Book value / share27.9625.98
Institutional Own % n/a n/a
Avg Daily Volume2933106.02993181.0

Valuation


BUY. MONSANTO CO's P/E ratio indicates a premium compared to an average of 23.95 for the Chemicals industry and a premium compared to the S&P 500 average of 19.42. For additional comparison, its price-to-book ratio of 4.28 indicates a significant premium versus the S&P 500 average of 2.68 and a discount versus the industry average of 4.31. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. The valuation analysis reveals that, MONSANTO CO seems to be trading at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
MON 24.06 Peers 23.95   MON 27.09 Peers 16.31

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

MON is trading at a valuation on par with its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

MON is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
MON 19.54 Peers 19.71   MON 1.72 Peers 1.63

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

MON is trading at a premium to its peers.

 

Average. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

MON trades at a valuation on par to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
MON 4.28 Peers 4.31   MON 7.80 Peers 119.55

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

MON is trading at a valuation on par with its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, MON is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
MON 4.07 Peers 2.53   MON 4.54 Peers 3.45

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

MON is trading at a significant premium to its industry.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

MON has a sales growth rate that significantly exceeds its peers.

 

 

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