Spreadsheet data updated daily
Updated on April 18th, 2022 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 43 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:
The agriculture stocks list was derived from two major exchange-traded funds. These are the AgTech & Food Innovation ETF (KROP) and the iShares Global Agriculture Index ETF (COW).
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: Tractor Supply Company (TSCO)
- Agriculture Stock #6: Federal Agricultural Mortgage Corporation (AGM)
- Agriculture Stock #5: FMC Corporation (FMC)
- Agriculture Stock #4: Ingredion Inc. (INGR)
- Agriculture Stock #3: The Andersons Inc. (ANDE)
- Agriculture Stock #2: The Toro Company (TTC)
- Agriculture Stock #1: Scotts Miracle-Gro (SMG)
- Final Thoughts
We have ranked our 7 favorite agriculture stocks below. The stocks are ranked according to expected returns over the next five years, in order of lowest to highest.
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: Tractor Supply Company (TSCO)
Tractor Supply Company is a retailer that sells farm and ranch products. Its customers include recreational farmers & ranchers, tradesmen and small businesses. Its offerings include clothing, pet supplies, trailers and accessories, lawn & garden supplies, heating systems, tools, fencing, lawnmowers, and power generators.
Tractor Supply reported its fourth-quarter earnings results on January 27th, 2022. Comparable store sales growth increased 12.7% due to comparable average ticket growth of 10.3% and comparable average transaction count growth of 2.4%. E-commerce sales experienced double-digit growth for the 38th consecutive quarter. Operating income grew 58.9% to $293.1 million from $184.5 million in the year-ago period.
Source: Investor Presentation
Net sales increased by 15.3% to $3.32 billion from $2.88 billion year-over-year. Revenue increased 15.32% to $3.32 billion year-over-year. Meanwhile, the company provided guidance for fiscal 2022 with net sales of $13.6 billion to $13.8 billion, and comparable store sales growth of 3.0% to 4.5%.
We expect annual returns of 6.3% per year, due to 10% expected EPS growth, the 1.6% dividend yield, and a -5.3% annual reduction from a declining P/E multiple.
Click here to download our most recent Sure Analysis report on Tractor Supply (preview of page 1 of 3 shown below):
Agriculture Stock #6: Federal Agricultural Mortgage Company (AGM)
Federal Agricultural Mortgage Corp, also known as Farmer Mac, is a shareholder-owned, federally chartered corporation, combining private capital and public sponsorship for the purpose of increasing access to and reducing the cost of capital for American agriculture and rural communities.
Source: Investor Presentation
The corporation provides financial solutions to a variety of agricultural communities, including agricultural lenders, agribusinesses, and other institutions which benefit from access to flexible, low-cost financing and risk management tools.
Often, Farmer Mac can provide the lowest cost of borrowing to agricultural and rural borrowers. In the last 30+ years, Farmer Mac has helped fund loans to over 91,000 rural borrowers in all 50 states, resulting in more than $63 billion of investments in rural America.
Farmer Mac released fourth quarter and FY 2021 results on February 28th. AGM reported net income of $107.6 million, up 20% compared to $89.2 million in FY 2020. The corporation generated $9.92 in GAAP EPS, which is 20% higher than $8.27 earned in 2020. Net interest income rose 16% year-over-year to $220.8 million from $190.6 million.
We expect annual returns of 8.0% per year, consisting of 6.5% expected EPS growth, the 3.5% dividend yield, and a -2% reduction due to a declining P/E multiple.
Click here to download our most recent Sure Analysis report on AGM (preview of page 1 of 3 shown below):
Agriculture Stock #5: FMC Corporation (FMC)
FMC Corporation is an agricultural sciences company that provides crop protection, plant health, and professional pest and turf management products. Through acquisitions, FMC is now one of the five largest patented crop chemical companies.
The company markets its products through its own sales organization and through alliance partners, independent distributors, and sales representatives. It operates in North America, Latin America, Europe, the Middle East, Africa, and Asia.
On February 8th, 2022, FMC released its fourth-quarter and full-year 2021 results.
Source: Investor Presentation
For the quarter the company reported revenue of $1.41 billion, an increase of 23% versus Q4 2020, and adjusted earnings per diluted share of $2.16, up 52% versus Q4 2020. The full-year 2021 ended with a revenue of $5.05 billion and total net income of $734 million ($6.93 per diluted share), up 33 percent compared to last year.
We expect annual returns of 8.1% per year, driven almost entirely by 8% expected EPS growth. Dividends are expected to be offset by a declining P/E multiple.
Click here to download our most recent Sure Analysis report on FMC (preview of page 1 of 3 shown below):
Agriculture Stock #4: Ingredion Inc. (INGR)
Ingredion is a multinational ingredient solutions company headquartered in Westchester, Illinois. Founded in 1906, INGR was incorporated as a Delaware corporation in 1997, operates in over 44 countries, and employs more than 11,000 people. The company is principally engaged in producing and selling starches and sweeteners for various industries.
Source: Investor Presentation
Essentially Ingredion turns grains, fruits, vegetables, and other plant-based materials into value-added ingredient solutions for the food, beverage, animal nutrition, brewing, and industrial markets. Ingredion operates in four business segments: North America, South America; Asia-Pacific; and Europe, Middle East, and Africa (“EMEA”).
INGR released fourth-quarter and full year 2021 results on February 3rd, 2022. Excluding costs associated with the joint venture with Arcor in Argentina, Ingredion saw net sales growth in all regions as net sales increased 10% to $1.75 Billion.
However, higher corn and raw material costs, including costs associated with the ramp-up of plant-based protein operations, have pushed the gross margin down to 16.5% from 22.1% the previous year. In addition, reported EPS was down to $1.09 compared from Q4 2020 due to a $5 million tax judgment in South America.
Total returns are estimated at 8.9% per year, driven by 3% expected EPS growth, the 2.9% dividend yield, and a 3% annual boost from an expanding P/E multiple.
Click here to download our most recent Sure Analysis report on Ingredion (preview of page 1 of 3 shown below):
Agriculture Stock #3: The Andersons Inc. (ANDE)
The Andersons, Inc. is an agriculture company that conducts business in North America. It operates through the following segments: Trade, Renewables, and Plant Nutrient. The Trade segment includes commodity merchandising and the operation of terminal grain elevator facilities. The trade segment contributed over 70% of the company’s revenue in 2021.
In the most recent quarter, revenue of $3.8 billion increased 50% versus Q4 2020, and adjusted earnings per diluted share of $1.14, up $0.58 versus Q4 2020. Growth was driven by strong results across all assets and solid agriculture products margins on rising fertilizers prices and tight supply.
The company has a long history of paying dividends and has increased its payout for 26 consecutive years. Shares currently yield 1.5%. Total returns are estimated at 9.9% per year.
Click here to download our most recent Sure Analysis report on ANDE (preview of page 1 of 3 shown below):
Agriculture Stock #2: The Toro Company (TTC)
The Toro Company was founded in 1914 as an engine manufacturer, providing power to early tractors. The company quickly shifted focus to mowers and in the century since, it has grown to $3.4 billion in annual revenue. Toro operates in North America as well as internationally, with three quarters of total revenue coming from the U.S.
Toro reported first quarter results on March 3rd. Q1 net sales improved 6.8% year-over-year to $932.7 million. Adjusted earnings per diluted share decreased from $0.85 in the prior year period to $0.66 in Q1 2022. With cash on hand and existing credit facilities, Toro acquired the Intimidator Group in January.
This acquisitions adds the complementary Spartan line of professional zero-turn mowers to Toro’s roster. Spartan has a good reputation and its addition to Toro’s business positions them well to gain customers and geographic exposure.
We expect annual returns of 13.4% per year over the next five years, driven by 10% EPS growth, the 1.4% dividend yield, and a 2% annual boost from an expanding P/E multiple.
Click here to download our most recent Sure Analysis report on The Toro Company (preview of page 1 of 3 shown below):
Agriculture Stock #1: Scotts Miracle-Gro (SMG)
The Scotts Miracle-Gro Company is one of the world’s leading marketers of branded consumer lawn and garden as well as hydroponic and indoor growing products. The company offers fertilizers, grass seed products, spreaders, outdoor cleaners, and any lawn-related weed, pest, and disease control products. Scotts Miracle-Gro generates around $4.9 billion in annual revenue and is headquartered in Marysville, Ohio.
Source: Investor Presentation
On February 1st, 2022, Scotts Miracle-Gro reported its Q1-2022 results. The company recorded sales of $566 million during the quarter, a 19% decline compared to Q1-2020, primarily driven by a 38% sales decline in the Hawthorne division partially offset by growth in every major product category.
However, note that the decline was compared against growth of 71% in the prior-year period, which had been driven primarily by an over-supply of cannabis grown in state-authorized markets. The U.S. consumer segment’s sales also decreased 16% to $342.4 million, but again, the decline was compared against 147% revenue growth in the first quarter a year ago.
We expect annual returns of 16.2% per year, driven by expected EPS growth of 7%, the 2.3% dividend yield and a sizable boost from an expanding P/E multiple.
Click here to download our most recent Sure Analysis report on Scotts Miracle-Gro (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, Toro, and The Andersons stand above the rest from a quality perspective thanks to their strong business models, attractive dividend yields, and long-term dividend growth potential.
At Sure Dividend, we often advocate for investing in companies with a high probability of increasing their dividends each and every year.
If that strategy appeals to you, it may be useful to browse through the following databases of dividend growth stocks:
- The Dividend Aristocrats List: S&P 500 stocks with 25+ years of dividend increases.
- The High Yield Dividend Aristocrats List is comprised of the 20 Dividend Aristocrats with the highest current yields.
- The Dividend Achievers List is comprised of ~350 stocks with 10+ years of consecutive dividend increases.
- The Dividend Kings List is even more exclusive than the Dividend Aristocrats. It is comprised of 38 stocks with 50+ years of consecutive dividend increases.
- The High Yield Dividend Kings List is comprised of the 20 Dividend Kings with the highest current yields.
- The Blue Chip Stocks List: stocks that qualify as Dividend Achievers, Dividend Aristocrats, and/or Dividend Kings
- The High Dividend Stocks List: stocks that appeal to investors interested in the highest yields of 5% or more.
- The Monthly Dividend Stocks List: stocks that pay dividends every month, for 12 dividend payments per year.
- The Dividend Champions List: stocks that have increased their dividends for 25+ consecutive years.
Note: Not all Dividend Champions are Dividend Aristocrats because Dividend Aristocrats have additional requirements like being in The S&P 500. - The Dividend Contenders List: 10-24 consecutive years of dividend increases.
- The Dividend Challengers List: 5-9 consecutive years of dividend increases.