Fertilizer prices soared in 2021 as raw material costs increased for nitrogen fertilizers and demand also rose, leading to a boom year for producers such as Nutrien. Prices for fertilizers such as nitrogen and potash spiked even higher after Russia invaded Ukraine; both countries are major fertilizer producers. More recently, they’ve come down for the same reason that commodity prices are down. Agribusiness is big business and touches on a wide array of industries. The scale required for operations has led to market power being concentrated in a handful of titans. These companies — many with healthy profits, cash flows, and dividends — offer excellent opportunities for investors.
It operates in North America, Latin America, Europe, the Middle East, Africa, and Asia. The Scotts Miracle-Gro Company is one of the world’s leading marketers of branded consumer lawn and garden as well as hydroponic and indoor growing products. The company offers fertilizers, grass seed products, spreaders, outdoor cleaners, and any lawn-related weed, pest, and disease control products. Consumer discretionary is an economic sector comprising non-essential products and services that individuals may only purchase when they have excess cash.
Pesticides (cash flow and dividends)
The High Yield Dividend Kings List is comprised of the 20 Dividend Kings with the highest current yields. The High Yield Dividend Aristocrats List is comprised of the 20 Dividend Aristocrats with the highest current yields. The company has over 1,700 retail locations in North America, South America, and Australia and is one of the world’s largest manufacturers and suppliers of potash, nitrogen, and phosphate.
Over the decades, through acquisitions, FMC became a disparate collection of chemical companies. FMC has transformed itself to solely focus on crop chemicals, having acquired DuPont’s crop chemicals portfolio in 2017, and completed the separation of its lithium business in 2019. FMC is now one of the largest patented crop protection companies globally. Another benefit from this sector is that farmland real estate investment trusts and certain agriculture stocks can provide passive income through regular dividend payouts. In addition, farmland investments may be able to provide a hedge against rising inflation. Investors can choose among companies providing agricultural products and services such as fertilizers, pesticides, seeds, processing, and livestock.
AppHarvest promises to do just that since the Kentucky-based company says it distributes produce to consumers within a one-day drive of its facilities. The proximity to markets compares favorably with conventional produce, which is often imported from abroad or shipped from California. The technology, paired with its industry-leading farm equipment, has led to a boom in the stock, which has delivered a total return of more than 10,000% since its debut in 1978. BASF, the world’s largest chemical producer, has released its preliminary figures for the first quarter of 2023, showing a decline.
The company quickly shifted focus to mowers and in the century since, it has grown to $4.5 billion in annual revenue. Toro operates in North America as well as internationally, with three quarters of total revenue coming from the U.S. «If they pull supply, natural gas prices go up … it means fertilizer prices go up, and we have a restart to the inflation regardless of what the central banks are doing on interest rates.» Companies with quarterly EPS or revenue growth of over 1,000% were excluded as outliers. 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.
Therefore, the current annual dividend of $1.20 per share is sustainable and likely to increase. I also like CF stock from a valuation perspective, as the stock trades at a forward P/E of 19.1 as compared to an industry average P/E of 35.8. The stock has been depressed in the current year, but valuations suggest scope for potential breakout on the upside. On the flipside, though, record production of soybeans in Brazil is likely to translate into low price for corn and soybean. However, valuations are attractive and dividends provide an incentive to consider exposure to CF stock.
So, for these reasons, DE stock is one of the top agriculture stocks right now. As a global agribusiness and food company, Bunge Limited is another attractive name among agriculture stocks for your portfolio. Bunge operates in the agribusiness, edible oil, sugar and fertilizer business. With steady visibility for growth in demand for oilseed, the company is well positioned for growth. It’s worth noting that Bunge has 51 oilseed processing plants globally.
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Net income is also up for the first nine months year-over-year, by 72.3%. Overall, earnings per share are up 72.6% for the year’s first nine months. The fourth quarter capped off an outstanding year from INGR, where net sales increased 15% during 2022 compared to 2021. Adjusted EPS also saw a 15% growth to $7.45, while the company also distributed $288 million in the form of dividends and share repurchases.
This was due to higher net realized selling prices from global supply uncertainties across its nutrient businesses and strong Retail performance. The Crop protection products segment saw sales increase by 17% year over year. Around 30% or more of the production of the world’s key food crops is located in regions of high to extremely high water stress, a figure that is set to increase in the future. This article from last year further explores the risk posed by water scarcity to portfolios. See the best agriculture stocks to buy now, according to analyst forecasts for the farm & heavy construction machinery industry.
Therefore, Adecoagro is a perfect company for exposure to a wide variety of agricultural commodities. Overall, the company’s financial performance does depend on agricultural commodity prices and weather conditions. Having said that, though, Adecoagro has consistently delivered stable EBITDA in the last few years.
And with the company targeting steady earnings growth in the coming years, dividends are likely to grow. Also, at a current dividend yield of 4.63%, BG stock is attractive for income investors. As of this writing, Faisal Humayun did not hold a position in any of the aforementioned securities. Fertilizer, crop, and seed chemical producers that are shifting their portfolios toward more environmentally friendly products. To combat this, some large crop protection producers such as FMC FMC and Corteva CTVA are investing substantially in biologicals, such as microbes or bacteria that can fight insects and weeds. These offerings are usually premium-priced, supporting above-industry revenue growth and margin expansion for the two companies.
Advantages of Agriculture Stocks
The company is currently being pressured by higher commodity prices that have led to a significant margin decline despite multiple pricing actions. Consequently, adjusted losses-per-share came in at ($2.04) compared to adjusted losses-per-share of ($0.82) in the same period of last year. Accordingly, adjusted earnings-per-share for the year equaled $4.10 compared to $9.23. The stocks are ranked according to expected returns over the next five years, in order of lowest to highest.
One focus is engineering high-protein, neutral-tasting chickpeas, which could become a next-generation, plant-based protein source. Beyond Meat relies on yellow pea protein for its products, but it might be tempted to switch at least some supply to chickpeas if the Precision product lives up to the hype. Pesticides have also seen a spike in prices due to supply chain constraints and material shortages.
ICL Group Ltd (NYSE:ICL)
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters. This could be a meaningful risk for agricultural companies because of their contribution to deforestation and land and water pollution.
Provide specific products and services to you, such as portfolio management or data aggregation. Corteva is another undervalued seed and crop chemical producer, set to benefit from the wider adoption of genetically modified seeds, on top of its own ambition on biologicals. The company expects 25% of its crop protection revenue to be generated by biologicals by 2035, compared with roughly 12% in 2022. For agricultural companies further along the value chain, tackling greenhouse gas emissions is likely to be primarily focused on direct operations and purchased electricity . Addressing emissions from the broader value chain will be more challenging. Food production is responsible for around one fourth of the world’s greenhouse gas emissions—the driving force behind global warming and climate change.
It has overperformed other stocks in the agriculture industry by 28 percentage points. It has underperformed other stocks in the agriculture industry by -27 percentage points. Paccar stock has a consensus Buy recommendation according to Wall Street analysts. Of the 7 analysts covering Paccar, 28.57% have issued a Strong Buy rating, 0% have issued a Buy, 57.14% have issued a hold, while 14.29% have issued a Sell rating, and 0% have issued a Strong Sell. Terex stock has a consensus Buy recommendation according to Wall Street analysts.
The Dividend Achievers List is comprised of ~350 stocks with 10+ years of consecutive dividend increases. At Sure Dividend, we often advocate for investing in companies with a high probability of increasing their dividends each and every year. The company provides over 20% of the global market on potash, 3% nitrogen, and 3% phosphate. The Toro Company was founded in 1914 as an engine manufacturer, providing power to early tractors.
Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive. We’d like to share more about how we work and what drives our day-to-day business. Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data. Agriculture stocks were down -0.53% in the last day, and down -0.14% over the last week.