DuPont Versus Corteva: Which Is the Better Buy?

Seth Goldstein: On June 1, DowDuPont spun off agriculture pure-play Corteva. The remaining company then renamed itself DuPont, a pure-play specialty chemicals company. We see opportunity in both stocks.

We award DuPont a narrow moat rating based on the intangible asset moat source due to the pricing power of its patented specialty chemicals, including products such as Kevlar and Tyvek. DuPont is well positioned to take advantage of growing markets that should result in revenue and profit growth above GDP. This includes increased EV adoption, growing demand for semiconductors, increased connectivity, and the continued recovery in U.S. housing. We think the market is overly concerned that the U.S.-China trade war will drag on profits, putting DuPont’s shares in 4-star territory relative to our $93 per share fair value estimate.

We award Corteva a wide moat rating from the intangible asset moat source due to the pricing power of its patented seed and crop chemicals products. We think the market is overemphasizing the near-term profit impact from the potential that flooding impacts U.S. crop planting this year, leaving Corteva undervalued relative to our $41 per share fair value estimate.