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TheStreet Open House
Monsanto Co
MON : NYSE : Basic Materials
$113.55 0.92 | 0.82%
Today's Range: 112.28 - 113.85
Avg. Daily Volume: 4,232,600
10/21/14 - 4:01 PM ET

Financial Analysis


MONSANTO CO's gross profit margin for the fourth quarter of its fiscal year 2014 has increased when compared to the same period a year ago. Sales and net income have grown, and although the growth in revenues has outpaced the average competitor within the industry, the net income growth has not. MONSANTO CO has average liquidity. Currently, the Quick Ratio is 1.02 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has significantly decreased by 37.29% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q4 FY14 Q4 FY13
Net Sales ($mil)2630.02202.0
EBITDA ($mil)27.0-130.0
EBIT ($mil)-157.0-288.0
Net Income ($mil)-156.0-249.0


Balance Sheet Q4 FY14 Q4 FY13
Cash & Equiv. ($mil)2407.03922.0
Total Assets ($mil)21981.020664.0
Total Debt ($mil)7761.02112.0
Equity ($mil)7875.012559.0


Profitability Q4 FY14 Q4 FY13
Gross Profit Margin53.8849.14
EBITDA Margin1.02-5.9
Operating Margin-5.97-13.08
Sales Turnover0.720.72
Return on Assets12.4612.01
Return on Equity34.6219.67
Debt Q4 FY14 Q4 FY13
Current Ratio1.892.32
Debt/Capital0.50.14
Interest Expense0.057.0
Interest Coverage0.0-5.05


Share Data Q4 FY14 Q4 FY13
Shares outstanding (mil)524.39529.03
Div / share0.430.38
EPS-0.31-0.47
Book value / share15.0223.74
Institutional Own % n/a n/a
Avg Daily Volume4199423.02935953.0

Valuation


BUY. The current P/E ratio indicates a discount compared to an average of 21.81 for the Chemicals industry and a premium compared to the S&P 500 average of 18.06. For additional comparison, its price-to-book ratio of 7.37 indicates a significant premium versus the S&P 500 average of 2.49 and a significant premium versus the industry average of 4.25. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
MON 21.57 Peers 21.81   MON 19.00 Peers 14.52

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 16.32 Peers 17.79   MON 1.58 Peers 1.24

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

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

 

Premium. 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 significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
MON 7.37 Peers 4.25   MON 12.50 Peers 62.91

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

MON is trading at a significant premium to 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 3.66 Peers 2.22   MON 6.68 Peers 2.60

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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