Why Jim Cramer Would Buy DuPont (DD) Over Deere & Company (DE)

NEW YORK (TheStreet) -- TheStreet's Jim Cramer says Deere & Company  (DE) "can't shoot straight" after its recent quarter and the company is talking about why farmers are tapped out, which is why the stock is going down.

Cramer notes Deere trades in a strange pattern because the stock went higher during the quarter and still continued to climb even when the company "lowered the boom" on the conference call. He does not like to own Deere because of its stair-step trading pattern.

If Cramer were to own a farm play, then he would go all-in with DuPont  (DD) to have some diversification. 

Must Watch: Jim Cramer Prefers DuPont over Deere as a Farming Play

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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Separately, TheStreet Ratings team rates DU PONT (E I) DE NEMOURS as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate DU PONT (E I) DE NEMOURS (DD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The debt-to-equity ratio is somewhat low, currently at 0.69, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.07, which illustrates the ability to avoid short-term cash problems.
  • DU PONT (E I) DE NEMOURS's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, DU PONT (E I) DE NEMOURS increased its bottom line by earning $3.04 versus $2.58 in the prior year. This year, the market expects an improvement in earnings ($4.30 versus $3.04).
  • 37.60% is the gross profit margin for DU PONT (E I) DE NEMOURS which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 14.15% trails the industry average.
  • Net operating cash flow has slightly increased to -$2,421.00 million or 9.22% when compared to the same quarter last year. Despite an increase in cash flow, DU PONT (E I) DE NEMOURS's cash flow growth rate is still lower than the industry average growth rate of 20.88%.
  • You can view the full analysis from the report here: DD Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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