4 TSX agricultural stocks to watch before New Year

November 30, 2022 04:30 AM EST | By Team Kalkine Media
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  • Ag Growth International’s sales in Q3 2022 were C$ 402.07 million.
  • In Q3 2022, Verde Agritech’s revenue was C$ 27.26 million.
  • TerraVest’s net income was noted at C$ 10,105 in Q3 2022.

The agriculture sector has a significant contribution to the Canadian economy. Within the sector, consumer-oriented agricultural exports form a crucial part. Consumer-oriented products include food directly sold in restaurants and supermarkets and depend on imports.  

Post-pandemic, the food sector is on its way to recovery. The food products and services went down during COVID-19 and remained the same in the past year. But with an economic recovery, the sector is also ready to shine again. Additionally, as demand for organic and clean ingredients is also rising.

Looking at the overall demand, it may have an effect on the stock market. As an investor entering the market, make sure to strategize your moves.

Additionally, set your goals and respond to different situations effectively. Check for the factors on which your portfolio is dependent. Once you identify them, make sure to align them. The market is going through continuous evolution. As an investor, it is vital to keep on repositioning your portfolio from time to time.

Let us look at four agricultural stocks along with their recent financial highlights:

  1. Verde Agritech Ltd. (TSX: NPK)

Verde AgriTech Ltd. produces solutions for soil improvement, crop protection and nutrition, and increased sustainability. Further, the company is engaged in promoting profitable and sustainable agriculture through the development of its Cerrado Verde Project.

In Q3 2022, Verde Agritech’s revenue rose to C$ 27.26 million compared to C$ 10.65 million in Q3 2021. The gross profit increased to C$ 21.2 million from C$ 8.19 million for the same comparative period.

The company’s EBITDA also registered a growth to C$ 8.17 million from C$ 3.66 million. The net profit grew to C$ 6.45 million from C$ 3.18 million for the reported quarter.

Verde Agritech’s gross margin increased to 78 per cent from 77 per cent. The company’s P/E (price-to-earnings) ratio was 15.7 and EPS was at C$ 0.35.

  1. TerraVest Industries Inc. (TSX: TVK)

TerraVest Industries Inc. manufactures propane, home heating products, storage vessels, natural gas liquids transport vehicles, anhydrous ammonia, and fiberglass storage tanks. The company operates in segments-Service, processing equipment, and fuel containment.  

In Q3 2022, TerraVest’s sales grew to C$ 145,134 from C$ 67,830 in Q3 2021. The company’s net income rose to C$ 10,105 from C$ 4,347 for the same period. Meanwhile, the adjusted EBITDA increased to C$ 21,680 from C$ 11,939.

The cash flow from operating activities witnessed an increase and was reported at C$ 9,718 versus C$ 2,245 in the same comparative period. The company paid a quarterly dividend of C$ 0.10 per share and posted a dividend yield of 1.621 per cent. TerraVest’s EPS is C$ 2.14.

On July 6, 2022, the company acquired Platinum Energy Services Ltd.

TerraVest Industries’ basic net earnings per share (EPS):

  1. Stantec Inc. (TSX: STN)

Stantec Inc. is an environmental consulting company and is also engaged in sustainable engineering and architecture. The company has its presence in the US, Canada and global. The company’s operating units include buildings, water, infrastructure, environmental services etc.  

In Q3 2022, Stantec’s revenue was reported at C$ 1,473.2 million compared to C$ 1,168.3 million in Q3 2021. The net revenue rose to C$ 1,160 million from C$ 932.9 million for the same comparable period.  

Meanwhile, the adjusted EBITDA grew to C$ 193.3 million from C$ 156 million. Meanwhile, the adjusted diluted EPS increased to C$ 0.86 from C$ 0.72 for the reported quarter. Stantec distributed a quarterly dividend of C$ 0.18 and reported its five-year dividend growth at 7.02 per cent.

On October 12, 2022, Stantec signed Letter of Intent to acquire L2P.

  1. Ag Growth International Inc. (TSX: AFN)

Ag Growth International Inc. is engaged in manufacturing belt conveyors, grain aeration equipment, grain storage bins, grain drying systems and augers. Mainly, the company operates livestock, conditioning and storage, Portable handling, and manufacturing sectors.

In Q3 2022, Ag Growth International’s sales rose to C$ 402.07 million from C$ 313.85 million in Q3 2021. The adjusted EBITDA grew to C$ 76.28 million from C$ 46.29 million in the same comparable period.

Notably, the company noted a profit of C$ 6.97 million versus a loss of C$ 73,000. The adjusted EBITDA margin increased to 19 per cent from 15 per cent in the reported quarter. With a dividend of C$ 0.15 per share, the company noted a dividend yield of 1.412 per cent.

Bottom Line

Before picking up a stock, whether it is from the agricultural sector or any other, look for all the governing factors. The stock price and company valuations, consumer demand, etc. play a crucial role. There may be fluctuations in the market but stay focused on your portfolio. As an investor, patience may help you to stay relevant in the constantly changing market.

Please note, the above content constitutes a very preliminary observation based on the industry and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.


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