Can these 7 agriculture stocks help America toward food self-reliance?

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Can these 7 agriculture stocks help America toward food self-reliance?

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 Can these 7 agriculture stocks help America toward food self-reliance?
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Highlights

  • Mosaic Company (NYSE: MOS) has a P/E ratio of 8.72. The stock gained 39.59% YTD.
  • Nutrien Ltd.’s (NYSE: NTR) dividend yield is 3.1%; the stock rose 25.29% YTD.
  • Archer-Daniels-Midland Co’s (NYSE: ADM) dividend yield is 2.51%; the stock rose 17.66% YTD.

Agriculture stocks are companies engaged in growing and harvesting crops and other related activities. For instance, these companies provide agricultural commodities like grains, seeds, fertilizers, and pesticides, besides livestock and processing services.  

American farmers have been battling extreme cold and droughts over the past year. In addition, rising fuel costs and pandemic restrictions have been a major concern for the farms. Yet, the hopes have been high due to the sustained demand for various food products.

A cursory glance at the performance of the VanEck Vectors Agribusiness ETF holds proof of this incredible momentum. It gave a 17.90% return YTD.

Here we explore seven agriculture stocks that gave positive returns year-to-date.

Mosaic Company (NYSE: MOS)

Mosaic’s market cap is US$12.3 billion, the P/E ratio is 8.72, and the forward P/E ratio is 7.06. Its current dividend yield is 0.98%, and the annualized dividend is US$0.30.

The revenue for the June quarter of 2021 was US$2.8 billion compared to US$2.04 billion in the same quarter the previous year. Its net income was US$437.2 million against US$47.4 million in the year-ago quarter. Its liquidity reserves were US$1.4 billion as of June 30, 2021.

The stock closed at US$31.26 on Aug 23, 2021. It gave around 39.59% return YTD.

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Tyson Foods, Inc. (NYSE: TSN)

Tyson Foods is a major producer of chicken, beef, pork, and other protein-based products. Its market cap is US$29 billion, the P/E ratio is 12.18, and the forward P/E ratio is 10.69.

Its current dividend yield is 2.23%, and the annualized dividend is US$1.78.

For the quarter ended July 3, 2021, its revenue was US$12.48 billion compared to US$10.02 billion in the same period a year ago. The net income was US$749 million compared to US$526 million in the corresponding period of 2020.

Its cash and cash equivalents were US$1.6 billion as of July 3, 2021. The stock closed at US$79.53 on Aug 23. The stock price increased by 23.09% YTD.

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Nutrien Ltd. (NYSE: NTR)                            

Nutrien is a fertilizer producer with a market cap of US$34.4 billion. Its P/E ratio is 35.88, and the forward P/E one year is 13.92. Its dividend yield is 3.1%, and the annualized dividend is US$1.471.

The revenue for the June quarter of 2021 was US$9.76 billion compared to US$8.43 billion in the same quarter of 2020. The net income was US$1,113 million compared to US$765 million in the comparative quarter of the previous year.

The cash and cash equivalents were US$1.79 billion as of June 30, 2021.

The stock closed at US$60.28 on Aug 23, and it gave around 25.29% return YTD.

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Archer-Daniels-Midland Company (NYSE: ADM)

ADM has a market capitalization of US$33.2 billion. The agriculture commodities processor company has a P/E ratio of 14.48, and the forward P/E one year is 12.38.

The dividend yield is 2.51%, and the annualized dividend is US$1.48.       

The company earned revenue of US$22.9 billion in the June quarter this year compared to US$16.3 billion in the year-ago period. The net income attributable to common shareholders was US$712 million compared to US$469 million in the June quarter of the previous year.

The cash and cash equivalents were US$869 million at the end of the quarter.

The stock rose 17.66% YTD. The closing price of the stock on Aug 23, 2021, was US$59.31.

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Bunge Limited Bunge Limited (NYSE: BG)

This agribusiness and food company provides a farm-to-consumer food chain. BG has a market capitalization of US$10.6 billion. 

Its P/E ratio is 5.56, and its forward P/E ratio is 8.47. The current dividend yield is 2.85%, and the annualized dividend is US$2.10.

The revenue for the June quarter was US$15.4 billion compared to US$9.5 billion in the corresponding quarter of 2020. The net income of the company was US$362 million compared to US$516 million in the June quarter of the previous year. 

The cash and cash equivalents were US$464 million at the end of June 30, 2021.

The stock closed at US$74.86 on Aug 23, 2021. The stock grew by 15.08% YTD.

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Corteva, Inc. (NYSE: CTVA)

The seed and crop-protection chemical products maker has a market capitalization of US$30.8 billion with a P/E ratio of 25.58 and forward P/E for one year of 20.67.

Its revenue for the June quarter was US$5.6 billion compared to US$5.2 billion in the same quarter the previous year. The net income of the company for the quarter was US$970 million compared to US$760 million in the June quarter of 2020.

The dividend yield of the company is 1.34%, and the annualized dividend is US$0.56.

The stock closed at US$41.95 on Aug 23. It gave a 9.68% return YTD.   

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Pinduoduo Inc. (NASDAQ: PDD)

The company has a market capitalization of US$102 billion and a forward P/E ratio for one year of 105.30.

This China-based online marketplace connects agriculture producers with consumers in China. The company has announced its second-quarter results on Tuesday.

The revenue for the second quarter ended June 30, 2021, was US$3,569.4 million and net income attributable to ordinary shareholders was US$374.0 million. 

Its average monthly active users were 738.5 million, a 30% increase year-over-year. 

After an 89% gain in revenue, the company announced the “10 billion Agriculture Initiative” to support agriculture modernization in rural areas.

The stock fell 47.82% YTD. It closed at US$81.08 on Aug 23, 2021. 

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Bottomline

Food is the basis of existence. Thus, the agriculture industry is unlikely to see major ups and downs. Generally, agriculture stocks are relatively stable and pay dividends. These stocks have performed well in the first half of this year. However, these are preliminary views, and any interest in stocks should be evaluated further from an investment point of view.

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