04-17-2026, 10:52 PM
(This post was last modified: Yesterday, 07:16 AM by Dividend Watcher.)
Well, I finally did something I've been toying with for the last year. I closed my position in John Deere & Co. (NYSE: DE).
It's been a great ride but here I am in my late 60's, retired and holding on to a position that has a dividend yield that hovers around 1.0% that hasn't been increased since last February (2025), a trailing P/E in the low 30's with an optimistic projected 10-15% increase in earnings for the next 5 years, and a trade war that's ongoing. Management has done a great job reshaping the company with AI and intelligent crop management along with expanding their turf & construction business. It's just gotten too expensive considering some of the other companies I'm building a position in right now.
I purchased my shares in 2013/2014 and have trimmed it 2x in the last couple years in the $300-400 range because it had gotten too big a share of my IRA. Today, I closed the position at $592 with a cost basis of $85. My Yield on Cost (YOC) was around 8% but, if I took the proceeds and invested in other promising companies paying around 3.3%, I could increase my dividend income from around $130/yr to approximately $360/yr. 13 years is a long time to hold on and if the yield was a little better, I probably would still be a shareholder. Yup, I'm sort of bragging. Then again, a couple months ago, I could have sold in the $650 range so maybe I'm not that smart.
I know Warren Buffet and Charlie Munger would have encouraged me to hold onto my shares as Deere is an iconic manufacturing company but I don't have billions of dollars in my investment accounts to draw from. I am glad I was listening to them when Chuck Carnevale recommended selling when the price got up in the $160 range because the valuation had gotten ahead of itself back in 2018/2019. A double seemed appealing at the time but Deere's management was discussing a lot of their changes they were working on in that time frame.
Peter Lynch was right, you only need a few big gains to make up for a lot of mistakes.
So what did I do with the proceeds? Two companies that have taken a recent correction are ADP and ACN. I suspect they got thrown out of portfolios because of the fear of AI that's come to investors' attention right now. Both are yielding around 3.4%, P/E's are less than 20 and the payout ratios are 50% or better. Neither company has traded at such a low P/E and that yield for over a decade. Both have major investments in AI and have products already using the technology to increase productivity. I expect both to be able to come close to DE's projected earnings growth but the valuation is what tipped the balance. What I don't use to build those positions is put in a money market account until I decide what other changes I'm going to make.
It's been a great ride but here I am in my late 60's, retired and holding on to a position that has a dividend yield that hovers around 1.0% that hasn't been increased since last February (2025), a trailing P/E in the low 30's with an optimistic projected 10-15% increase in earnings for the next 5 years, and a trade war that's ongoing. Management has done a great job reshaping the company with AI and intelligent crop management along with expanding their turf & construction business. It's just gotten too expensive considering some of the other companies I'm building a position in right now.
I purchased my shares in 2013/2014 and have trimmed it 2x in the last couple years in the $300-400 range because it had gotten too big a share of my IRA. Today, I closed the position at $592 with a cost basis of $85. My Yield on Cost (YOC) was around 8% but, if I took the proceeds and invested in other promising companies paying around 3.3%, I could increase my dividend income from around $130/yr to approximately $360/yr. 13 years is a long time to hold on and if the yield was a little better, I probably would still be a shareholder. Yup, I'm sort of bragging. Then again, a couple months ago, I could have sold in the $650 range so maybe I'm not that smart.
I know Warren Buffet and Charlie Munger would have encouraged me to hold onto my shares as Deere is an iconic manufacturing company but I don't have billions of dollars in my investment accounts to draw from. I am glad I was listening to them when Chuck Carnevale recommended selling when the price got up in the $160 range because the valuation had gotten ahead of itself back in 2018/2019. A double seemed appealing at the time but Deere's management was discussing a lot of their changes they were working on in that time frame.
Peter Lynch was right, you only need a few big gains to make up for a lot of mistakes.
So what did I do with the proceeds? Two companies that have taken a recent correction are ADP and ACN. I suspect they got thrown out of portfolios because of the fear of AI that's come to investors' attention right now. Both are yielding around 3.4%, P/E's are less than 20 and the payout ratios are 50% or better. Neither company has traded at such a low P/E and that yield for over a decade. Both have major investments in AI and have products already using the technology to increase productivity. I expect both to be able to come close to DE's projected earnings growth but the valuation is what tipped the balance. What I don't use to build those positions is put in a money market account until I decide what other changes I'm going to make.