8 Best Agriculture Stocks to Buy in 2023 The Motley Fool

The world’s population is up roughly 300% in the last century. To protect yourself from this loss, you can invest in inflation-proof companies, the ones that can pass along their increasing costs to customers. And when it comes to food, people need to eat… no matter what the rest of the market is doing. If you’re an income investor, it has an above-average yield of 2.7%, has grown the annual dividend for 10 consecutive years, and averaged a 17.2% compound annual growth rate over the past five years.

Now, without further ado, let me guide you through my outlook, my thoughts, and my investment picks. Get this delivered to your inbox, and more info about our products and services. It comes with a little more risk, but the same is true for upside potential. And since avocados have seen a spike in demand, this has helped the company grow.

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It was formed 2018 through the merger of Potash Corporation of Saskatchewan and Agrium. The company is coming off a strong 2022 with organic sales up 15% and more than a 202 basis point expansion in operating earnings before interest, taxes, depreciation, and amortization (EBITDA) margin. ScottsMiracle-Gro is a leader in lawn care products, but unlike most of the companies on this list, Scotts sells to individual consumers, rather than to large companies in the food supply chain.

• Globally, people are suffering from food shortages, increasing demand, supply chain disruptions, and runaway energy and commodity prices.
• Fertilizers such as potash, nitrogen and phosphates are vital agricultural products that nourish soil and crops to maximize crop yields.
• The recent Infrastructure Investments and Jobs Act (IIJA) marks the largest federal investment into infrastructure projects in more than a decade and should boost Lindsay’s infrastructure business.
• It invests heavily in developing new formulations and biologicals and boasts a robust portfolio of pest- and weed-control products in addition to fertilizers.
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• This company makes and sells lawn and garden products in the United States and other regions.

They also manage roughly 31,000 acres of farmland for other landowners. This REIT pays out distributions or dividends every month to investors. The https://forexarticles.net/what-is-software-development/ 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.

Caterpillar and Deere & Company

Check out our list of other Top Materials Stocks, or you can create your own Stock Screen to help you achieve diversification into desired sectors you like. However, that still offers a lot of opportunities to make money as I do not believe that farm income or demand fundamentals will take a hit in 2023 (at least not a lasting hit). Still, Mosaic and fellow fertilizer producer Nutrien Ltd. see a strong market ahead. Last week, Nutrien Chief Executive Officer Ken Seitz warned of looming shortages in coming years, with supplies from Russia and Belarus constrained. I believe that Deere is a great investment whenever corrections occur.

Others get less attention despite being well positioned to see gains amid economic, financial and geopolitical strife. For example, because you invest in real farmland, the holding period is usually at least three to five years. You may be able to sell your shares sooner in some cases, but that isn’t guaranteed. Also, investing in a single farm means you get less diversification than in other investments, like farmland mutual funds and ETFs. In the past, the only way to invest in farmland was to buy a farm or pasture and earn a return from tilling the fields or watching the land appreciate in value. That limited scope of investment meant investing in farmland only made sense for those who could produce from the land.

For those focused more on sustainability, CF Industries may be of interest. They make and sell clean energy, nitrogen, and hydrogen products, including fertilizers used in agriculture. They also sell products that support other non-agriculture industries, such as diesel exhaust fluid. As the name suggests, Nutrien provides crop nutrients, among other things.

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MRMD’s trailing-12-month EV/Sales multiple of 1.62 is 56% lower than the industry average of 3.68. Its trailing-12-month Price/Sales multiple of 1.09 is 73.9% lower than the industry average of 4.17. During the fiscal fourth quarter that ended December 31, 2022, DOLE’s revenue increased 4.7% year-over-year to $2.36 billion. Its gross profit grew 66.6% from the year-ago value to $157.29 million.

The company offers potash, nitrogen, phosphate, and sulfate products used in farms worldwide. This company owns high-quality North American farmland and offers loans to farmers secured by farm real estate. Returns are generated through both debt and equity investments. CF has 14 FY1 Up analyst revisions within the last 90 days and zero downward revisions despite recent earnings being amiss. Q revenue of $2.87B beat by $246.02M, an increase of 173.66% year-over-year, so the company is optimistic about its long-term free cash flow, which is excellent, up 238.28% compared to its sector. Mosaic’s C Valuation is fair, with a forward P/E ratio of 4.92x, nearly 60% below its sector peers, and forward EV/Sales of 1.29x, more than 20% below the sector, indicating this stock comes at a relative discount.

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Archer-Daniels-Midland is one of the largest agriculture companies in the world. It sources, transports, processes and distributes many products. The company converts corn into bioproducts, starches and sweeteners. The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.

The Moline, Ill.-based company has in the past year reported uneven profit and sales growth. The farm equipment industry has also gained, and is now ranked No. 48. Deere is the top-rated company in its farm machinery industry group, ahead of irrigation company Lindsay (LNN), according to IBD Stock Checkup. The group has climbed from No. 60 a week ago and No. 127 three months ago.

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And it’s a period where the momentum of increases in farmland values has been maintained, even if there’s a slight trailing off from the very fast rates of increase that we’ve seen in the past year. However, I would rule out any of these tensions in the years ahead. If anything, the reopening of the Chinese economy will spur demand for crops and meats (both are related), as well as energy commodities (including corn). One of the issues the company raised is the pressure on farm margins.

In an earnings release dated Feb. 22, Mosaic reported a 55% year-over-year increase in revenue. The company said it plans to return nearly all 2023 generated free cash to shareholders through dividends and share repurchases. Analysts rate the stock a buy and have an average 12-month price target of $55.17. Mosaic is a mine-to-market company engaged in every aspect of crop nutrition.

One of the biggest advantages of agriculture investments is that people always need to eat, so there will usually be stable demand in the industry. As a result, some investors see this sector as somewhat recession-proof and a good way to diversify a portfolio. 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.

• Tyson recently made some organizational changes that will help the company grow.
• There is also significant uncertainty in the global economy and geopolitical environment.
• Its trailing-12-month Price/Sales multiple of 1.09 is 73.9% lower than the industry average of 4.17.
• Changes in the methodology used may have a material impact on the returns presented.
• Darling is expected to announce third-quarter earnings on Nov. 8.

We believe FMC’s current stock price is offered at a discount to our determination of the company’s intrinsic value given our estimates of both enhanced margins and higher earnings on a normalized basis. 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. Pesticides have also seen a spike in prices due to supply chain constraints and material shortages.