Monsanto Stock, Up 25% in a Year, Still Cheap-ish By Some Measures

Rarely do Supreme Court watchers come away from a hearing at the high court so convinced that the justices will rule for one side, but that was the consensus this week after a hearing over the right of farmers to use seeds from crops they’ve grown, as opposed to buying Monsanto (MON) patented seeds each planting season.

So persuaded were reporters of the justices’ intention to throw out the challenge to Monsanto’s enforcement of patents that the Los Angeles Times’ David Savage noted:

“At Tuesday's arguments before the nation's high court, the only mystery seemed to be why the justices had voted to hear the farmer's claim that he could get around Monsanto's patent protection by buying next-generation seeds from a grain elevator.”

The New York Times and Wall Street Journal reporters had similar takeaways.

So, one long-shot risk eliminated for Monsanto, which would seen to have great long-term prospects. Rising population and global prosperity are pushing demand for food up. Climate change is threatening farm productivity in some regions. Tools – herbicide resistant seeds and the herbicide they resist, Roundup – would seem ever more essential.

MON Chart

MON data by YCharts

As seen from the stock chart above, Monsanto has grown rapidly in recent years and its shares are trading below historical valuations, based on PE ratio. The dividend yield is paltry, but for those far-sighted enough to instead track dividend growth, Monsanto measures up nicely.

MON Dividend Yield Chart

MON Dividend Yield data by YCharts

Yes, there are many who oppose genetically-altered crops. But to date, they haven't slowed Monsanto much.

Jeff Bailey, The Editor of YCharts, is a former reporter, editor and columnist at the Wall Street Journal and New York Times. He can be reached at editor@ycharts.com.

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