MONSANTO CO. $113 (New York symbol MON, Aggressive Growth Portfolio; Manufacturing & Industry sector; Shares outstanding: 524.4 million; Market cap: $59.3 billion; Price-to-sales ratio: 3.9; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.monsanto.com) gets 70% of its revenue from genetically modified seeds for corn, soybeans and other crops. The remaining 30% comes from selling herbicides, mainly under the Roundup brand.
In its 2014 fiscal year, which ended August 31, 2014, Monsanto’s earnings rose 10.4%, to $2.7 billion from $2.5 billion in 2013. Per-share earnings gained 13.5%, to $5.22 from $4.60, on fewer shares outstanding. Without unusual items, such as costs to settle a lawsuit, earnings per share rose 14.7%, to $5.23 from $4.56.
Sales rose 6.7%, to $15.9 billion from $14.9 billion. Seed sales gained 3.9%, as record soybean seed demand offset weaker sales of corn seeds. Sales of other agricultural products rose 13.1%.
The company expects to earn $5.75 to $6.00 a share in fiscal 2015. The stock trades at 19.2 times the midpoint of that range. That’s reasonable for a company that dominates its market and spends a high 11% of its sales on research.
Monsanto is a buy.
