This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

DuPont Needs to Recover and Keep Rewarding Shareholders

Stocks in this article: DD MON

NEW YORK ( TheStreet) -- Nobody likes to lose a big lawsuit, but it was especially egregious for DuPont (DD) to lose one to an arch-nemesis concerning a licensing agreement about their agricultural seed business. A "bad seed" can spell trouble for a living, viable entity.

DuPont's loss was at the hands of Monsanto (MON), the company that brought the world Roundup herbicide and a technology called "Roundup Ready."

Analysts don't expect the legal victory/loss to impact upon either company very much in the short term. DuPont said it would appeal the verdict award. One of their spokesmen, Doyle Karr, said the company would not incur a charge against earnings because it anticipates winning the appeal.

"It does not have any impact on our current products or on our pipeline" of products, Karr said. That should help investors to breathe a little easier (unless someone's spraying Roundup in your immediate vicinity).

In a press release, the company's legal counsel gave some details as to why DuPont thinks this legal award won't hold up:

DuPont strongly disagrees with the verdict that was reached in favor of Monsanto in Monsanto's patent case against DuPont in the United States District Court in St. Louis, Missouri.

There were several fundamental errors in the case which deprived the jury of important facts and arguments and led to the disappointing outcome. DuPont will appeal at the earliest possible opportunity and expects to overturn this verdict.

DuPont alleges that several aspects of Monsanto's misconduct involving this patent, which were not tried in this case, will be presented to a different jury as part of DuPont's antitrust and patent misuse case against Monsanto in September 2013.

"DuPont is and always has been committed to innovation and providing farmers with diverse technology options. We continue to stand by our position that we did not infringe the Roundup Ready soybean patent and that the Monsanto patent is invalid. DuPont will continue to fight hard to ensure American farmers have choices and that no one company decides what is best for them," concluded DuPont Senior Vice President and General Counsel Thomas L. Sager.

Monsanto's temporary victory is a rather hollow one, in this author's opinion. It involves the technology it licensed that concerns an ominous aspect of genetically modified seeds that allow crops to tolerate weed killer. My instincts cringe as I imagine eating crops that can tolerate a deadly weed killer.

Let investors and consumers vote on this matter with their wallets. DuPont's stock closed down Thursday by less than 2% at $49.02. With its current $1.72-a-share dividend, the current yield is nearly 3.51%. That represents a rather high 45% payout ratio, which is a concern.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs