Monsanto Co

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MON : NYSE : Basic Materials
$107.40 | %
Today's Range: 106.63 - 107.76
Avg. Daily Volume: 3,733,900
08/26/16 - 4:01 PM ET

Financial Analysis


MONSANTO CO's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. MONSANTO CO has weak liquidity. Currently, the Quick Ratio is 0.83 which shows a lack of 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 38.71% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)4189.04579.0
EBITDA ($mil)1459.01876.0
EBIT ($mil)1281.01700.0
Net Income ($mil)717.01141.0


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)1216.01207.0
Total Assets ($mil)20328.022259.0
Total Debt ($mil)10505.08983.0
Equity ($mil)5110.08338.0


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin61.0963.59
EBITDA Margin34.8240.96
Operating Margin30.5837.13
Sales Turnover0.650.69
Return on Assets5.0711.91
Return on Equity19.831.54
Debt Q3 FY16 Q3 FY15
Current Ratio1.472.58
Debt/Capital0.670.52
Interest Expense108.0102.0
Interest Coverage11.8616.67


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)437.53468.58
Div / share0.540.49
EPS1.632.39
Book value / share11.6817.79
Institutional Own % n/a n/a
Avg Daily Volume3741488.04274516.0

Valuation


BUY. MONSANTO CO's P/E ratio indicates a significant premium compared to an average of 25.17 for the Chemicals industry and a significant premium compared to the S&P 500 average of 25.13. For additional comparison, its price-to-book ratio of 9.16 indicates a significant premium versus the S&P 500 average of 2.82 and a significant premium versus the industry average of 5.83. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, MONSANTO CO proves to trade 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 44.95 Peers 25.17   MON 13.98 Peers 15.92

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

MON is trading at a significant premium to its peers.

 

Discount. 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 discount 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 21.57 Peers 21.01   MON NM Peers 1.78

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.

 

Neutral. 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's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
MON 9.16 Peers 5.83   MON -56.34 Peers 89.08

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 3.52 Peers 2.34   MON -12.97 Peers -7.38

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.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

MON significantly trails its peers on the basis of sales growth

 

 

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