Flavors and fragrances are high-margin products mostly manufactured through synthetic chemistry, but specialty agriculture has a place in the market as interest increases in items such as natural perfume. Vertical farming also seems to be a good fit here since the amounts of water and land needed are much lower than in conventional food production. Local Bounti, a Montana-based ag tech start-up, also has big ambitions, targeting $462 million in revenue by 2025 as it plans to open four new facilities. The company counts Cargill as a major investor and partner; the privately owned agriculture giant loaned $200 million to Local Bounti in September 2021 and is considering financing all of its future facilities through 2025.
Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, ifc markets review free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation. These are the agriculture stocks that had the highest total return over the last 12 months.
- Its offerings include clothing, pet supplies, trailers and accessories, lawn & garden supplies, heating systems, tools, fencing, lawnmowers, and power generators.
- The ex-dividend date is the last day for purchasing a stock to be eligible for the upcoming dividend.
- The stock closed the year at $ 9.5, representing a 1.6-fold increase during the year.
- The company markets its products through its own sales organization and through alliance partners, independent distributors, and sales representatives.
So, it’s clear that agriculture companies are not going out of business anytime soon. And, the trends of the future might even enable some small companies right now to become giants as the demand for food grows. One stock market segment where one can hunt for such stocks is the small cap category. This is made up of firms that have a market capitalization ranging between $200 million to $2 billion.
With its dependable dividend and forecasted growth, it’s a safe bet on a resurgence of farm revenues. First quarter revenue growth was driven by a7% contribution from price and a 3% decline in volume with a 4% currency headwind, especially in EMEA. The company benefited from strong pricing actions, growth of new products, expanded market access, and cost discipline in the quarter.
While we expect no EPS growth, so the 3.5% dividend yield and ~9.3% annual returns from an expanding P/E multiple will fuel future returns. Nutrien Ltd. is a Canadian company formed through Agrium and PotashCorp’s merger in a closed transaction on January 1, 2018. The company produces and markets crop nutrients to agricultural, industrial, and feed customers worldwide. Lindsay Corporation provides water management and road infrastructure services in the United States and internationally.
Agriculture Stock #6: Deere & Company (DE)
These are the AgTech & Food Innovation ETF (KROP) and the iShares Global Agriculture Index ETF (COW). In July, Tractor Supply reported Q results that included a 5.5% increase in same-store sales and a 10.7% increase in earnings per share. On the top line, it now expects at least $13.95 billion in revenue, review lessons in corporate finance up from its previous guidance of $13.6 billion. On the bottom line, it now expects EPS of at least $9.48, 28 cents higher than its previous guidance. The seven agriculture stocks to buy should all benefit from the investment the Biden Administration and the USDA are making in smart farming.
- Investing in Tyson Foods isn’t a direct farmland investment, but it exposes you to our vital food industry.
- One of these methods is by investing in stocks related to the farming or agriculture business.
- Green Labs plans to utilize blockchain technology in this promising next phase, and in doing so provide more value for its expanding customer base.
- The agricultural industry has been affected by the COVID-19 pandemic.
- Through acquisitions, FMC is now one of the five largest patented crop chemical companies.
The major contributors to this increase are the largest state-owned banks, with PetroChina and Kweichow Moutai following closely behind. Similarly, Janus Henderson reported that 98% of US companies either increased their dividends or maintained them at the same level in the second quarter of 2023. This percentage is significantly higher than the global average.
The company paid $79.7 million for those acquisitions, which have a capitalization rate of 5.1%. Capitalization is the expected rate of return over the initial investment. Thus, if the surge in demand for farm equipment continues, AGCO stock should appreciate in kind. The company provides over 20% of the global market on potash, 3% nitrogen, and 3% phosphate.
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All 70 projects aim to help farmers, academics, agriculture-related companies, and government agencies work together to produce a more efficient, innovative, and climate-friendly industry. We believe FMC’s current stock price is offered at a discount to our determination of the company’s bitfinex review intrinsic value given our estimates of both enhanced margins and higher earnings on a normalized basis. The standardized performance presented herein has been calculated by MoneyMade based on data obtained from the third-party platform hosting the investment and is subject to change.
Last week, Intrepid Potash topped Q1 earnings and revenue estimates. IPI is trading higher as profits are bolstered following sanctions limiting potash shipments from Russia and Belarus. Corteva generates advantaged market preference through its unique distribution strategy, together with its balanced and globally diverse mix of seed, crop protection, and digital products and services. To select the stocks for our list, we picked names from the Vanguard Growth Index Fund Admiral Shares ETF.
China Green Agriculture
As a result, the company reported record adjusted EBITDA of $7.1 billion in 2021 and $12.1 billion in 2022. Investors can choose among companies providing agricultural products and services such as fertilizers, pesticides, seeds, processing, and livestock. As producers of basic foods, many agricultural stocks are considered consumer staples, meaning that demand for their products is not affected by the broader economy. Another benefit from this sector is that farmland real estate investment trusts (REITs) and certain agriculture stocks can provide passive income through regular dividend payouts.
Moreover, this allows the company to pay a dividend of $4.52, which it recently raised in Q1 by 7.6%. In fact, Deere has raised its dividend in each of the past five years, and it has consistently paid an annual dividend for every year of the past 32 years. That gives investors a lot of comfort that it can survive the present recession. The company manufactures equipment used in farming, construction, forestry and large-scale landscaping. Factor in the current 48-cent quarterly dividend, which hasn’t been reduced since 2006, and you have roughly $2 more of return. Leadership narrowed their fiscal 2023 outlook which guides for net sales growth of 7% to 8% and adjusted EPS in the range of $4.70 to $4.80 per diluted share, a solid 13.1% year-over-year increase at the midpoint.
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A stronger dollar has also been weighing on ag commodities such as fertilizer. Since global commodities are priced in dollars, a strong dollar makes them more expensive in other currencies, bringing down the price. “The world’s largest nitrogen fertilizer” producer, CF on May 20 predicted that prices of the fertilizer would stay high until “at least” 2024, Seeking Alpha quoted Bloomberg as reporting. Additionally, despite the elevated prices, farmers’ demand for nitrogen remains strong, a CF executive told Bloomberg. As mentioned above, global dividends have experienced significant growth this year. China’s largest companies have paid out 1.5 trillion yuan ($206 billion) in dividends this year, which has already exceeded the 1.27 trillion yuan paid out in 2022, according to a report by Bloomberg.
The U.S. Department of Agriculture (USDA) announced on Sept. 14 that it would invest up to $2.8 billion in 70 smart-farming initiatives selected as part of the Partnerships for Climate-Smart Commodities. While these 70 projects won’t give investors an answer regarding The 7 Best Agriculture Stocks to Buy Now, it does reinforce why the agriculture industry is a smart bet for future growth. One example of a major technology developed by MSD Animal Health is a sound collection device that uses artificial intelligence technology to detect Bovine Respiratory Disease in cows called Whisper On Arrival. MSD Animal Health was named best animal health company in North America by market intelligence firm IHS Markit, so gaining exposure to that division through Merck shares could make it a good investment. Founded as a utility and telecommunications infrastructure manufacturing company in Japan, NEC Corporation has grown since its founding in 1898 to become a global leader in nearly every high-tech industry.
This company gives you diversified exposure to agricultural products, packaged and bulk oils and fats, and other necessary supporting roles of the food industry. The stock of the company has been on a bearish run for the past two years. From a price of $ 199.14, the stock declined up to $ 161 in the year 2021.
Tyson Foods innovates continually to make protein more sustainable, tailor food for everywhere it’s available, and raise the world’s expectations for how much good food can do. However, the stock is down about 18% YTD, so this puts it on a cheap forward multiple of just 13.6x for 2022 with earnings forecast at $12.45 per share. In 2023, EPS is likely to hit $14.48, effectively lowering the forward P/E multiple to just 11.7x. Moreover, the stock yields just over 1% at $90.25 at the close July 14, and has consistently raised the dividend every year for the past nine years. The dividend payment of 96 cents is more than covered by the EPS of $11.77, making the payout ratio very low at just around 8%.