NYSE:AGCO

Stock Analysis Report

Executive Summary

AGCO Corporation manufactures and distributes agricultural equipment and related replacement parts worldwide.

Rewards

Trading at 26.3% below its fair value

Earnings are forecast to grow 15.71% per year

Earnings grew by 35.1% over the past year

Risk Analysis

Has a high level of debt



Snowflake Analysis

Undervalued with proven track record.


Similar Companies

Share Price & News

How has AGCO's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AGCO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.1%

AGCO

-1.7%

US Machinery

-0.09%

US Market


1 Year Return

17.6%

AGCO

20.1%

US Machinery

23.9%

US Market

Return vs Industry: AGCO underperformed the US Machinery industry which returned 22.4% over the past year.

Return vs Market: AGCO underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

AGCOIndustryMarket
7 Day-3.1%-1.7%-0.09%
30 Day-6.3%-0.9%3.1%
90 Day-5.6%5.0%10.4%
1 Year18.7%17.6%22.4%20.1%26.6%23.9%
3 Year17.4%14.3%39.3%30.3%50.9%41.2%
5 Year74.3%66.2%77.6%56.2%78.1%58.5%

Price Volatility Vs. Market

How volatile is AGCO's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is AGCO undervalued compared to its fair value and its price relative to the market?

28.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AGCO ($74.54) is trading below our estimate of fair value ($101.13)

Significantly Below Fair Value: AGCO is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: AGCO is good value based on its PE Ratio (18.3x) compared to the Machinery industry average (23.4x).

PE vs Market: AGCO is good value based on its PE Ratio (18.3x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: AGCO is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: AGCO is good value based on its PB Ratio (1.9x) compared to the US Machinery industry average (2.5x).


Next Steps

Future Growth

How is AGCO forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

15.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AGCO's forecast earnings growth (15.7% per year) is above the savings rate (1.7%).

Earnings vs Market: AGCO's earnings (15.7% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: AGCO's earnings are forecast to grow, but not significantly.

Revenue vs Market: AGCO's revenue (1.9% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: AGCO's revenue (1.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AGCO's Return on Equity is forecast to be low in 3 years time (13%).


Next Steps

Past Performance

How has AGCO performed over the past 5 years?

-5.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AGCO has high quality earnings.

Growing Profit Margin: AGCO's current net profit margins (3.4%) are higher than last year (2.5%).


Past Earnings Growth Analysis

Earnings Trend: AGCO's earnings have declined by -5% per year over the past 5 years.

Accelerating Growth: AGCO's earnings growth over the past year (35.1%) exceeds its 5-year average (-5% per year).

Earnings vs Industry: AGCO earnings growth over the past year (35.1%) exceeded the Machinery industry 9.6%.


Return on Equity

High ROE: AGCO's Return on Equity (10.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is AGCO's financial position?


Financial Position Analysis

Short Term Liabilities: AGCO's short term assets ($4.0B) exceed its short term liabilities ($3.0B).

Long Term Liabilities: AGCO's short term assets ($4.0B) exceed its long term liabilities ($2.0B).


Debt to Equity History and Analysis

Debt Level: AGCO's debt to equity ratio (58.6%) is considered high.

Reducing Debt: AGCO's debt to equity ratio has increased from 37.4% to 58.6% over the past 5 years.

Debt Coverage: AGCO's debt is well covered by operating cash flow (29.2%).

Interest Coverage: AGCO's interest payments on its debt are well covered by EBIT (28.4x coverage).


Balance Sheet

Inventory Level: AGCO has a high level of physical assets or inventory.

Debt Coverage by Assets: AGCO's debt is covered by short term assets (assets are 2.2x debt).


Next Steps

Dividend

What is AGCO's current dividend yield, its reliability and sustainability?

0.88%

Current Dividend Yield


Dividend Yield vs Market

company0.9%marketbottom25%1.4%markettop25%3.7%industryaverage1.9%forecastin3Years0.9%

Current dividend yield vs market & industry

Notable Dividend: AGCO's dividend (0.86%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: AGCO's dividend (0.86%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, AGCO has been paying a dividend for less than 10 years.

Growing Dividend: AGCO's dividend payments have increased, but the company has only paid a dividend for 7 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (15.2%), AGCO's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AGCO's dividends in 3 years are forecast to be thoroughly covered by earnings (11.4% payout ratio).


Next Steps

Management

What is the CEO of AGCO's salary, the management and board of directors tenure and is there insider trading?

6.6yrs

Average management tenure


CEO

Martin Richenhagen (66yo)

15.5yrs

Tenure

US$20,648,619

Compensation

Prof. Dr. Martin H. Richenhagen has been Director of Linde plc since October 22, 2018. He has been the Chairman of AGCO Corporation since August 15, 2006 and has been its President and Chief Executive Offi ...


CEO Compensation Analysis

Compensation vs Market: Martin's total compensation ($USD20.65M) is above average for companies of similar size in the US market ($USD6.46M).

Compensation vs Earnings: Martin's compensation has increased by more than 20% in the past year.


Management Age and Tenure

6.6yrs

Average Tenure

54.5yo

Average Age

Experienced Management: AGCO's management team is seasoned and experienced (6.6 years average tenure).


Board Age and Tenure

12.0yrs

Average Tenure

67.5yo

Average Age

Experienced Board: AGCO's board of directors are seasoned and experienced ( 12 years average tenure).


Insider Trading

Insider Buying: AGCO insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$48,25708 Nov 19
Lucinda Smith
EntityIndividual
Shares607
Max PriceUS$79.50
SellUS$388,79504 Nov 19
Gary Collar
EntityIndividual
Shares5,000
Max PriceUS$77.76
SellUS$364,78012 Aug 19
Gary Collar
EntityIndividual
Shares5,000
Max PriceUS$72.96
SellUS$60,30812 Aug 19
Richard Smith
EntityIndividual
Role
Senior Key Executive
Executive Officer
Shares825
Max PriceUS$73.10
SellUS$338,46306 Aug 19
Richard Smith
EntityIndividual
Role
Senior Key Executive
Executive Officer
Shares4,651
Max PriceUS$72.77
SellUS$169,91105 Aug 19
Lara Long
EntityIndividual
Role
Chief Accounting Officer
VP & Chief Accounting Officer
Shares2,326
Max PriceUS$73.05
SellUS$1,585,94409 May 19
Robert Crain
EntityIndividual
Role
Senior Key Executive
Senior VP & GM of North America
Shares21,767
Max PriceUS$72.86
SellUS$224,40026 Feb 19
Lucinda Smith
EntityIndividual
Shares3,300
Max PriceUS$68.00
SellUS$438,90025 Feb 19
Lucinda Smith
EntityIndividual
Shares6,600
Max PriceUS$66.50
SellUS$139,24725 Feb 19
Lara Long
EntityIndividual
Role
Chief Accounting Officer
VP & Chief Accounting Officer
Shares2,100
Max PriceUS$66.31
SellUS$322,21515 Feb 19
Gary Collar
EntityIndividual
Shares5,000
Max PriceUS$64.44
SellUS$214,50014 Feb 19
Lucinda Smith
EntityIndividual
Shares3,300
Max PriceUS$65.00

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Andy Beck (55yo)

    Senior VP & CFO

    • Tenure: 17.6yrs
    • Compensation: US$3.00m
  • Martin Richenhagen (66yo)

    Chairman

    • Tenure: 15.5yrs
    • Compensation: US$20.65m
  • Robert Crain (59yo)

    Senior VP & GM of North America

    • Tenure: 14yrs
    • Compensation: US$3.18m
  • Hans-Bernd Veltmaat (64yo)

    Senior VP & Chief Supply Chain Officer

    • Tenure: 11.5yrs
    • Compensation: US$3.06m
  • Greg Peterson

    Vice President of Investor Relations

    • Ulrich Stockheim

      Chief Communications Officer

      • Tenure: 2.3yrs
    • Eric Hansotia (50yo)

      Senior VP & COO

      • Tenure: 1yrs
    • Rob Smith (54yo)

      Executive Officer

      • Tenure: 6.3yrs
      • Compensation: US$2.48m
    • Roger Batkin (50yo)

      Senior VP

      • Tenure: 6.6yrs
    • Lara Long (49yo)

      VP & Chief Accounting Officer

      • Tenure: 1.7yrs

    Board Members

    • Gerry Shaheen (74yo)

      Lead Director

      • Compensation: US$279.71k
    • Mike Arnold (63yo)

      Independent Director

      • Tenure: 6.3yrs
      • Compensation: US$222.31k
    • Roy Armes (66yo)

      Independent Director

      • Tenure: 6.3yrs
      • Compensation: US$226.15k
    • Wolfgang Deml (73yo)

      Independent Director

      • Tenure: 20.9yrs
      • Compensation: US$245.07k
    • Hendrikus Visser (74yo)

      Independent Director

      • Tenure: 19.8yrs
      • Compensation: US$249.04k
    • George Minnich (69yo)

      Independent Director

      • Tenure: 12yrs
      • Compensation: US$254.50k
    • Martin Richenhagen (66yo)

      Chairman

      • Tenure: 15.5yrs
      • Compensation: US$20.65m
    • Suzanne Clark (51yo)

      Independent Director

      • Tenure: 2.8yrs
      • Compensation: US$223.55k
    • Mallika Srinivasan (60yo)

      Director

      • Tenure: 8.5yrs
      • Compensation: US$220.00k
    • P. Benson (72yo)

      Independent Director

      • Tenure: 15.1yrs
      • Compensation: US$238.44k

    Company Information

    AGCO Corporation's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: AGCO Corporation
    • Ticker: AGCO
    • Exchange: NYSE
    • Founded: 1990
    • Industry: Agricultural and Farm Machinery
    • Sector: Capital Goods
    • Market Cap: US$5.493b
    • Shares outstanding: 75.52m
    • Website: https://www.agcocorp.com

    Number of Employees


    Location

    • AGCO Corporation
    • 4205 River Green Parkway
    • Duluth
    • Georgia
    • 30096
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    AGCONYSE (New York Stock Exchange)YesCommon StockUSUSDApr 1994
    AGJDB (Deutsche Boerse AG)YesCommon StockDEEURApr 1994
    AGJETLX (Eurotlx)YesCommon StockITEURApr 1994

    Biography

    AGCO Corporation manufactures and distributes agricultural equipment and related replacement parts worldwide. The company offers high horsepower tractors for larger farms, primarily for row crop production; utility tractors for small- and medium-sized farms, as well as for dairy, livestock, orchards, and vineyards; and compact tractors for small farms, specialty agricultural industries, landscaping, and residential uses. It also offers combines for harvesting grain crops, such as corn, wheat, soybeans, and rice; and application equipment, including self-propelled, three- and four-wheeled vehicles and related equipment for liquid and dry fertilizers and crop protection chemicals, and for after crops emerge from the ground. In addition, the company offers hay tools and forage equipment comprising round and rectangular balers, loader wagons, self-propelled windrowers, forage harvesters, disc mowers, spreaders, rakes, tedders, and mower conditioners for harvesting and packaging vegetative feeds used in the beef cattle, dairy, horse, and renewable fuel industries. Further, it offers implements, including disc harrows; leveling seed beds and mixing chemicals with the soils; heavy tillage to break up soil and mix crop residue into topsoil; field cultivators that prepare smooth seed bed and destroy weeds; drills for small grain seeding; and planters and other planting equipment, and loaders. Additionally, it offers grain storage bins and related drying and handling equipment systems, as well as seed-processing systems, swine and poultry feed storage and delivery, ventilation and watering systems, and egg production systems and broiler production equipment; and replacement parts, as well as produces diesel engines, gears, and generating sets. It markets its products under the Challenger, Fendt, GSI, Massey Ferguson, and Valtra brands through a network of independent dealers and distributors. AGCO Corporation was founded in 1990 and is headquartered in Duluth, Georgia. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/23 23:30
    End of Day Share Price2020/01/23 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.