Monsanto Criticizes Minnesota's Restrictions on Dicamba-Based Herbicide

As reported by FOX Business yesterday, Dec. 13, Scott Partridge - Monsanto's ( MON ) vice president of global strategy - criticised in an interview Minnesota's announced restrictions on how the herbicide dicamba can be used by the farmers in 2018:

"There's no scientific reason to have a cutoff date or a temperature limit. There is no testing that supports it," he said.

In order to reduce herbicide drift to neighboring fields, the state of Minnesota has scheduled for June 20 the last date on which it is possible to apply for the herbicide. Minnesota has also introduced high-temperature restrictions when applying for the herbicide.

The decision of the state of Minnesota follows soybean farmers' complaints about harm to their harvests this year.

Scott Partridge added that when dicamba-based herbicide is used in accordance with the instructions on how to use the product, it "doesn't move beyond the buffer zone and damage nearby crops," reported Fox Business.

The sale of dicamba-based herbicides also increases in the sales volume of Roundup, which caused sales from Monsanto's Agricultural Productivity segment to increase by 6.1% to $3.727 billion in 2017.

The segment accounted for 25.5% of Monsanto's total 2017 net sales of $14.64 billion. The sales from the other company's segment, Seeds and Genomics, came in at $10.91 billion (or about 74.5% of the total), a 9.26% increase year over year.

The chart below illustrates the trend in Monsanto's revenue over the last five fiscal years:

Yesterday Monsanto closed up 37% to $118.09 per share on the New York Stock Exchange. For the 52-weeks through Dec. 13, Monsanto has gained 13.2% and underperformed the S&P 500 index by 5%.

Source: Yahoo Finance

The stock has a market capitalization of $51.98 billion, a price-book (P/B) ratio of 8.06 versus an industry average of 1.91, a price-earnings (P/E) ratio of 23.20 versus an industry average of 23.77 and a price-sales (P/S) ratio of 3.58 versus an industry median of 1.31.

The forward P/E ratio is 21.01 versus an industry median of 16.58. For full fiscal 2018, which will close next calendar year on Aug. 31, analysts forecast EPS of $5.68 on sales of $15.2 billion.

The average target price is $125.18 and the recommendation rating on Monsanto is 2.6 out of 5.

Monsanto distributes an annual dividend of $2.16, through quarterly payments of 54 cents, to its shareholders, for a dividend yield of 1.84% versus an industry median of 1.81%.

The forward dividend yield is also 1.84% versus an industry median of 1.90%.

Disclosure: No positions in Monsanto.

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This article first appeared on GuruFocus .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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