![]() ![]() The ongoing payout ratio will probably be in the 25-35% range, so the dividend should grow with increases in earnings over the years. All the while keeping their farmer-focused culture.Ĭorteva will pay its first dividend in September which annualizes at $0.52 a share for about a 2% yield. They will use their scale to generate a best-in-class cost structure and continue to emphasize new product launches to grow faster than the overall market. Management is committed to a strong capital allocation discipline with targeted returns-on-invested capital in the 15-18% range versus cost-of-capital of about 8%. Simply put, consumers and governments are not demanding all farmers become “organic.” As such, crops protected by products derived from biological organisms rather than synthetic chemicals remains a niche market, representing less than 5% of the addressable agricultural market.Īs a business, Corteva has attractive prospects. That said, it must cater to the market it serves so currently, most of its crop protection products are chemicals. Protecting crops from external threats is part of this mandate.Ĭorteva is committed to delivering effective and environmentally friendly formulations and it is a leader in organic solutions. Yes, Corteva is in the crop chemical business but to serve farmers and help feed the world, seeds need to realize their full potential. To say the seed business has high barriers to entry is probably an understatement.Ĭorteva’s crop protection business includes herbicides, insecticides, fungicides and biologicals. ![]() Corteva is a top global player with a best-in-class genetics platform that is widely regarded as being impossible to replicate, for all practical purposes. Their patented seeds make crops resistant to damaging insects and significantly improve yields. The seed business is a high-tech one and Corteva spends 11% of its sales on research and development, surpassing all competitors. Roughly 55% of revenues are generate by seeds and the remainder come from crop protection products. The vehicle he created in 1926 to accomplish his goal, the Hi-Bred Corn Company, later morphed into Pioneer-Hi-Bred International which was bought by DuPont in 1999.Ĭorteva is a pure-play agricultural company with two businesses. Its roots go back to Henry Wallace, a devoted Christian and one-time vice president of the United States, whose self-proclaimed mission was to end starvation and help feed the world. FX Publications Inc is a subsidiary of IG US Holdings, Inc (a company registered in Delaware under number 4456365).Despite its non-descript name, Corteva is a wonderful business with a storied past. Registered Address: 251 Little Falls Drive, Wilmington, DE 19808. FXP is not responsible for any trading decisions taken by persons not intended to view this material. Any examples given are provided for illustrative purposes only and no representation is being made that any person will, or is likely to, achieve profits or losses similar to those examples. It is not a solicitation or a recommendation to trade derivatives contracts or securities and should not be construed or interpreted as financial advice. ![]() This information is made available for informational purposes only. Information presented by FXP should be construed as market commentary, merely observing economical, political and market conditions. residents or individuals domiciled in the U.S. Any and all information provided by FXP is not intended for use by U.S. We recommend that you seek independent advice and ensure you fully understand the risks involved before trading.įX Publications Inc., abbreviated herein as FXP, (d.b.a DailyFX) is no longer a registered Introducing Broker with the Commodity Futures Trading Commission and is no longer a Member of the National Futures Association in the U.S. We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances. Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors. ![]()
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