Spreadsheet data updated daily
Updated on October 27th, 2021 by Bob Ciura
Individual products, businesses, and even entire industries (newspapers, typewriters, horse and buggy) go out of style and become obsolete.
Perhaps more than any other industry, agriculture is here to stay. Agriculture started around 14,000 years ago. It’s a safe bet we will be practicing agriculture far into the future.
And, the growth of the global population is tied to increasing agricultural efficiency. The agricultural revolution allowed greater population growth (and led to the industrial revolution).
As the global population grows, so does the need for improved agricultural production. This creates a long-term demand driver for agriculture stocks.
You can download the complete list of all 36 agriculture stocks (along with important financial metrics such as price-to-earnings ratios, dividend yields, and dividend payout ratios) by clicking on the link below:
Investing in farm and agriculture stocks means investing in an industry that:
- Has stable long-term demand
- Has withstood the test of time, and is extremely likely to be around far into the future
- Benefits from advancing technology
This article analyzes 7 of the best agriculture stocks in detail. You can quickly navigate the article using the table of contents below.
Table of Contents
- Agriculture Stock #7: CF Industries Holdings (CF)
- Agriculture Stock #6: Gladstone Land Corp. (LAND)
- Agriculture Stock #5: Bunge Limited (BG)
- Agriculture Stock #4: Deere & Company (DE)
- Agriculture Stock #3: Scotts Miracle-Gro (SMG)
- Agriculture Stock #2: Caterpillar Inc. (CAT)
- Agriculture Stock #1: Archer Daniels Midland (ADM)
- Final Thoughts
We have ranked our 7 favorite agriculture stocks below. These rankings are qualitative in nature. We believe the following 7 agriculture stocks are the best picks in the industry right now, due to a combination of business quality and future growth prospects.
Even better, all 7 agriculture stocks pay dividends to shareholders, making them attractive for income investors. Interested investors should view this as a starting off point to more research.
Agriculture Stock #7: CF Industries Holdings (CF)
CF Industries manufactures and distributes nitrogen fertilizer products worldwide. Its primary products include ammonium nitrate, urea ammonium nitrate solution, granular urea, and anhydrous ammonia.
It also offers non–fertilizer products like diesel exhaust fluid, nitric acid and urea liquor.
CF Industries distributes its products through cooperatives, traders, wholesalers, farmers and industrial customers. CF Industries generates $5.6 billion in annual revenue.
Click here to download our most recent Sure Analysis report on CF Industries (preview of page 1 of 3 shown below):
Agriculture Stock #6: Gladstone Land Corp. (LAND)
Gladstone Land Corporation is a Real Estate Investment Trust, or REIT, that specializes in the owning and operating of farmland in the U.S.
Gladstone Land Corporation is a real estate investment trust, or REIT, that specializes in the owning and operating of farmland in the U.S. The trust owns over 140 farms, comprising over 100,000 acres of farmable land.
Gladstone Land is a monthly dividend stock with a current yield of 2.4%.
Click here to download our most recent Sure Analysis report on Gladstone Land (preview of page 1 of 3 shown below):
Agriculture Stock #5: Bunge Limited (BG)
Bunge’s core business is to supply and transport agricultural commodities. Bunge operates through the following segments: Agribusiness, Edible Oil Products, Milling Products, Sugar and Bioenergy, and Fertilizer.
The Agribusiness segment involves storage and transportation of agricultural commodities. The Edible Oil Products segment includes production and sale of vegetable oils, shortenings, margarines, and mayonnaise.
Meanwhile, the Milling Products segment produces wheat flours, bakery mixes, corn-based products, and rice.
Lastly, its Sugar and Bioenergy segment manufactures sugar and ethanol, while the Fertilizer segment produces and distributes fertilizer.
Bunge has improved its ROIC trends in recent periods. Raising its ROIC has meaningfully improved its cash flow, which fuels its impressive cash returns to shareholders. On a positive note, rising global populations are a long-term growth catalyst for Bunge, which will result in higher demand for agricultural commodities of all sorts.
The emerging markets are an increasingly important area for Bunge. The company formed a $775 million, 50-50 joint venture with BP’s (BP) sugar and bioenergy assets in Brazil to provide future growth in South America. Future expansion will help the company boost its earnings growth, to continue paying its dividend.
With a 2.3% dividend yield, Bunge is an attractive stock for investors interested in dividends and growth.
Agriculture Stock #4: Deere & Company (DE)
Deere stands to benefit from major global trends—specifically, the growing population and increasing demand for food.
Deere operates two core segments, Agriculture & Turf and Construction & Forestry, with most of its sales derived from Agriculture & Turf equipment.
Related: The 9 Best Construction Stocks analyzed on Sure Dividend.
We see Deere as accruing ~3% total annual returns, powered by 2% earnings growth. The yield of ~1.1% adds to shareholder returns, but a declining P/E multiple will weigh on the stock.
Click here to download our most recent Sure Analysis report on Deere (preview of page 1 of 3 shown below):
Agriculture Stock #3: Scotts Miracle-Gro (SMG)
Scotts Miracle-Gro earns a place on this list because it is a strong business with significant competitive advantages. SMG manufactures lawn and garden care products. Its family of brands includes Scotts, Miracle-Gro, Ortho, and more.
Shares have a relatively low dividend yield of 1.8%, but the combination of dividends and expected EPS growth of 7% per year (with a flat P/E multiple) will fuel expected returns of ~15% per year.
And, with over 10 years of annual dividend increases, SMG is a blue chip stock.
Click here to download our most recent Sure Analysis report on Scotts Miracle-Gro (preview of page 1 of 3 shown below):
Agriculture Stock #2: Caterpillar (CAT)
Caterpillar was founded in 1925. Today, it is an industrial giant, manufacturing heavy machinery used in the construction and mining industries. The company also manufactures ancillary industrial products such as diesel engines and gas turbines. Caterpillar is on the exclusive Dividend Aristocrats list.
We see 8% annual earnings-per-share growth in the coming years as Caterpillar continues to accrue benefits from booming construction and mining markets in the US, China, and other places around the globe.
Total returns are estimated at ~3.8% per year over the next five years.
Click here to download our most recent Sure Analysis report on Caterpillar (preview of page 1 of 3 shown below):
Agriculture Stock #1: Archer Daniels Midland (ADM)
Archer Daniels Midland sources, transports, processes, and distributes a number of products. Its largest business is Corn Processing, where it converts corn into sweeteners, starches, and bioproducts.
The Agricultural Services segment utilizes its extensive global grain elevator, transportation networks, and port operations to buy, store, clean, and transport agricultural commodities.
The company has increased its dividend for over 40 consecutive years. This makes Archer Daniels Midland a Dividend Aristocrat.
The combination of a solid dividend yield, a recession-resistant business model and a long history of growing dividends, makes ADM our top agriculture stock.
Click here to download our most recent Sure Analysis report on Archer-Daniels Midland (preview of page 1 of 3 shown below):
Final Thoughts
Agriculture stocks are a compelling place to look for long-term stock investments. That’s because the demand drivers of the industry make it extremely likely to be around far into the future.
We believe the 7 agriculture stocks examined in this article are the best within the industry. Of these, Scotts Miracle-Gro, Caterpillar, and Archer-Daniels-Midland stand above the rest from a quality perspective thanks to their strong business models, attractive dividend yields, and long-term dividend growth potential.