Deere & Company (DE) vs PACCAR Inc. (PCAR)

Deere & Company and PACCAR Inc. are both Farm & Heavy Construction Machinery companies. Deere & Company is the larger, with a market value of $187.7B against $58.3B — 3.2× the size. PACCAR Inc. trades at the lower P/E: 23.4× against 38.3×. Deere & Company grew revenue faster over the last twelve months: 7.99% against −10.6%. Deere & Company has the higher net margin (10.2% vs 9.00%) and the lower return on invested capital (4.93% vs 8.85%). Both pay a dividend; PACCAR Inc. yields more (3.35% vs 1.43%). Across the 23 metrics below, PACCAR Inc. leads on 15 and Deere & Company on 8.

Valuation

Metric DE PCAR Farm & Heavy Construction Machinery median
P/E 38.25 23.38 23.38
P/S 3.88 2.11 0.81
P/B 6.65 2.89 1.43
Price to free cash flow 23.26 15.93 25.31
EV/EBITDA 20.52 14.22 12.13
EV/Sales 5.00 2.32 1.20
Earnings yield 2.61% 4.28% 2.73%
Free cash flow yield 4.30% 6.28% 3.02%

Profitability

Metric DE PCAR Farm & Heavy Construction Machinery median
Gross margin 36.59% 19.99% 24.21%
Operating margin 19.47% 13.33% 4.47%
Net margin 10.16% 9.00% 1.49%
Free cash flow margin 16.69% 13.24% 2.15%
Return on equity 18.33% 12.76% 4.16%
Return on assets 4.52% 5.69% 1.45%
Return on invested capital 4.93% 8.85% 3.36%

Growth

Metric DE PCAR Farm & Heavy Construction Machinery median
Revenue growth (TTM) 7.99% (10.56%) 2.18%
EPS growth (last fiscal year) (27.79%) (42.91%) —
Revenue growth, 5-year CAGR 5.15% 8.72% 7.34%
Net income growth, 5-year CAGR 12.81% 12.80% 0.00%

Health

Metric DE PCAR Farm & Heavy Construction Machinery median
Debt to equity 2.28 0.72 0.67
Current ratio 2.10 3.12 1.98
Net debt to EBITDA 4.65 1.30 1.12

Dividend

Metric DE PCAR Farm & Heavy Construction Machinery median
Dividend yield 1.43% 3.35% 1.45%
Payout ratio 0.14 0.14 0.08

Size

Metric DE PCAR Farm & Heavy Construction Machinery median
Market cap 187.72b 58.25b 772.81m

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