Monsanto is most famous (or infamous depending on the point of view) multinational linked to agriculture.

They produce seeds, GMO seeds, fertilizers and herbicides. A couple of years ago Monsanto did really well as price of food had gone up sharply.
As world population grows and developing countries become richer, more and more food needs to be produced.
No doubt Monsanto is well placed to profit of such trends.
Price for MON shares is reasonable, if one looks at Forward P/E= 16. Less so if one looks at current P/E=25
Price on Sales = 3 is a bit high.
Debt is close to zero and, as a bonus, there is a reasonable 1.7% dividend Yield.
My main doubt is whether I should get Monsanto or its main competitor, Swiss company Syngenta AG (SYT), which has about the same level of revenues, but 1/3 smaller Market cap, has a reasonable current P/E= 16, reasonable P/sales around 2, and a small debt level.
pays a bit higher 2% dividend,
Comparing Monsanto and Syngenta on Businesweek, it does look that although Monsanto is one third more expensive, it is has larger and is better growing.
Reading around the web, I found there is much controversy about Monsanto, which is accused of unethical behaviors. What I understood is that Monsanto is World leader in GMO and that Monsanto, in its effort to increase agricultural productivity, produced in the past stuff that hurt human health.
Monsanto is also a defensive stock. People do eat even during Bear Markets
Leave a comment