CHS Inc. Class B Cumulative Redeemable Preferred Stock (CHSCO)

FairStock Score: 31/100 — RISKY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I approach CHSCO not as an operating business but as a cumulative preferred claim on a cyclical agribusiness cooperative. The underlying enterprise is essential—energy, agronomy, grain marketing—and revenue is large: $35.5B in FY2025 ended 2025-08-31, though down from $39.3B in FY2024 and $45.6B in FY2023. Profitability has weakened more sharply: net income was $1.9B in FY2023, $1.1B in FY2024, and $597.9M in FY2025. Quarterly fiscal 2026 shows the volatility: $260.5M in Q1 ended 2025-11-30, a $-147.1M loss in Q2 ended 2026-02-28, and $267.4M in Q3 ended 2026-05-31. FairStock calculates ROE of 5.25%, ROCE of 0.12%, and D/E of 0.33—modest leverage but very weak returns on capital. Its cooperative scale and essential products are a moat of sorts, but the low ROCE suggests that moat is not converting into high returns. The Lynch category is CYCLICAL—Farm Products: earnings follow the economic cycle, which fits. At the 2026-10-13 close of $25.60, the preferred yields 7.69% and sits near the bottom of its $25.38-$27.03 52-week range. That high yield may compensate for uncertainty, but FairStock Score 31/100 suggests limited quality or margin of safety. The supplied data gives no P/E, P/B, or EPS for this preferred, so valuation must lean on price, yield, and the parent's earnings. The cumulative feature is a comfort, but the claim depends on the cooperative's continuing cash generation. I see no obvious bargain; price looks fair at best, and the trajectory is not improving. I would demand a wider discount or clearer earnings recovery before calling it compelling.

In plain English: CHS Inc. is a large farm cooperative that supplies fuel, crop inputs, grain marketing and food ingredients. Its recent profits have been uneven and lower than a few years ago, and its returns on capital look weak, though debt is moderate. The Class B preferred stock pays a high 7.69% dividend and trades at $25.60, near the low end of its one-year range, but the business numbers suggest the price is fair at best rather than a clear bargain.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q3 2026 10-Q (period ended 2026-05-31) · fiscal Q2 2026 10-Q (period ended 2026-02-28) · fiscal Q1 2026 10-Q (period ended 2025-11-30) · fiscal Q3 2025 10-Q (period ended 2025-05-31) · FY2025 10-K (period ended 2025-08-31) · FY2024 10-K (period ended 2024-08-31) · FY2023 10-K (period ended 2023-08-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer