5 agriculture stocks to explore as food inflation spikes: ADM to FMC

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5 agriculture stocks to explore as food inflation spikes: ADM to FMC

5 agriculture stocks to explore as food inflation spikes: ADM to FMC
Image source: © Jirsak | Megapixl.com

Highlights 

  • Archer-Daniels-Midland Company (NYSE: ADM) has a dividend yield of 1.67%, and its P/E ratio is 20.51.
  • Deere & Company (NYSE: DE) has a P/E ratio of 24.25 and a dividend yield of 0.96%.
  • FMC Corporation's (NYSE: FMC) P/E ratio is 24.47, and its dividend yield is 1.52%.

The agriculture industry comprises companies engaged in farming, production of food grain, fertilizers, and livestock feed, and manufacturing of agri equipment, among others.  

Agriculture-based companies, including food producers, generally are least affected by inflation as the demand remains constant. Agriculture is critical to sustaining life.  

Because of the Russia-Ukraine crisis, supply chain constraints and higher energy costs, prices of many essential commodities have increased manifold lately, negatively impacting the economy. Fortunately, though, agricultural commodities are never out of demand.

Here we discuss five agriculture stocks that gave positive returns in one year and year-to-date.
 

Archer-Daniels-Midland Company (NYSE: ADM)

Closing Price on April 20, 2022: US$98.22
Price range in last 52 weeks: US$98.44 to US$56.91

Chicago, Illinois-based Archer Daniels Midland is a major processor of corn, wheat, oilseeds, and other agricultural commodities. It runs a nutrition business for humans and animals. The company also owns a network of logistical assets and stores to transport the items worldwide.

For the fiscal year ended December 31, 2021, it reported a revenue of US$85.25 billion compared to US$64.36 billion in fiscal 2020. Its net income came in at US$2.7 billion or US$4.79 per share diluted compared to US$1.78 billion or US$3.15 per share diluted in fiscal 2020.

The company has a market capitalization of US$55.25.

The stock has a dividend yield of 1.67%, with an annualized dividend of US$1.60. Its P/E ratio is 20.51, and the forward P/E for one year is 18.22. 

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5 agriculture stocks to explore as food prices rise: ADM to FMC

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Bunge Limited (NYSE: BG)

Closing Price on April 20, 2022: US$126.00
Price range in last 52 weeks: US$127.97 to US$71.73

Bunge is an agribusiness and food company. Its operations include a farm-to-consumer food chain. BG is a leading oilseed processor. It also sells packaged vegetable oils and other food products. It was founded in 1818 and is based in St. Louis, Missouri.

It will announce its first-quarter results for fiscal 2022 on April 27.

The company booked net sales of US$59.15 billion in FY2021 compared to US$41.4 billion in the previous year. The net income to the common shareholders was US$2.04 billion or US$13.64 per diluted share compared to US$1.12 billion or US$7.71 per share diluted in FY2020.

Bunge has a market capitalization of US$17.98 billion. 

BG’s P/E ratio is 9.2, and the forward P/E for one year is 11.46. The stock has a dividend yield of 1.7% with an annualized dividend of US$2.10.

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Deere & Company (NYSE: DE)

Closing Price on April 20, 2022: US$437.39
Price range in last 52 weeks: US$446.76 to US$320.50

Moline, Illinois-based Deere manufactures agricultural equipment. Its four reportable segments are small agriculture and turf, production and precision agriculture, construction and forestry, and John Deere Capital. The company sells its products through a strong dealer network. 

The company reported revenue of US$44.02 billion for fiscal 2021 compared to US$35.54 billion in fiscal 2020. Its net income was US$5.97 billion or US$18.99 per share diluted compared to US$2.75 billion or US$8.69 per share diluted in FY 2020.

The company has a market capitalization of US$134.18 billion. Its P/E ratio is 24.25, and the forward P/E for one year is 19.26. The stock has a dividend yield of 0.96%, with an annualized dividend of US$4.20.

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Mosaic Company (NYSE: MOS)

Closing Price on April 20, 2022: US$75.77
Price range in last 52 weeks: US$79.28 to US$28.26

Mosaic is a producer of crop nutrients phosphate and potash. Its assets include phosphate rock mines in Florida, Louisiana, Peru, and Brazil and potash mines in New Mexico, Brazil, and Saskatchewan. The company is headquartered in Tampa, Florida.

The company will release its first-quarter earnings on May 2, 2022.

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It posted a net income attributable to the company of US$1.63 billion or US$4.27 per share diluted in the fiscal year ended Dec 31, 2021, compared to US$0.666 billion or US$1.75 per share diluted in FY 2020. Its net sales were US$12.36 billion against US$8.68 billion in FY2020.

The company has a market capitalization of US$27.43 billion. MOS’s P/E ratio is 17.7, and the forward P/E for one year is 6.18. The stock has a dividend yield of 0.58%, with an annualized dividend of US$0.45. 

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5 agriculture stocks to explore as food prices rise: ADM to FMC© Niserin | Megapixl.com

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FMC Corporation (NYSE: FMC)

Closing Price on April 20, 2022: US$139.49
Price range in last 52 weeks: US$140.99 to US$87.27

FMC is a pure-play crop chemical company based in Philadelphia, Pennsylvania. FMC is one of the largest patented crop chemical companies and is focused on developing new products.

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For the fiscal year ended December 31, 2021, the company earned revenue of US$5.05 billion compared to US$4.64 billion a year ago. The net income came in at US$736 million or US$5.70 per share diluted compared to US$552 million or US$4.22 per share diluted in fiscal 2020. 

FMC will announce its Q1, 2022 earnings on May 2.

The company has a market capitalization of US$17.56 billion. Its P/E ratio is 24.47, and the forward P/E for one year is 18.02. The stock has a dividend yield of 1.52%, with an annualized dividend of US$2.12.

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Bottom line:

Although agricultural companies are generally the least affected by the inflationary pressures, investors should not let their guard down. They should carefully analyze them and the broader sector before investing in stocks.

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