Spreadsheet data updated daily
Updated on July 18th, 2023 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 40+ 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 Co. (TSCO)
- Agriculture Stock #6: Deere & Company (DE)
- Agriculture Stock #5: Archer Daniels Midland Corporation (ADM)
- Agriculture Stock #4: Toro Co. (TTC)
- Agriculture Stock #3: Lindsay Corporation (LNN)
- Agriculture Stock #2: FMC Corporation (FMC)
- Agriculture Stock #1: Nutrien Ltd. (NTR)
- 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 Co. (TSCO)
- 5-year expected annual returns: 8.5%
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 financial results for its first quarter on April 27th, 2023. Tractor Supply Company’s net sales for Q1 2023 increased by 9.1% to $3.3 billion, driven by positive contributions from Orscheln Farm and Home, new store openings, and comparable store sales growth. Gross profit increased by 10.7% to $1.17 billion, and gross margin increased to 35.5%.
Net income decreased by 2.2% to $183.1 million, and diluted earnings per share remained unchanged at $1.65. The company opened 17 new Tractor Supply stores and three new Petsense by Tractor Supply stores during the quarter.
Click here to download our most recent Sure Analysis report on TSCO (preview of page 1 of 3 shown below):
Agriculture Stock #6: Deere & Company (DE)
- 5-year expected annual returns: 8.5%
Deere & Company is the largest manufacturer of farm equipment in the world. The company also makes equipment used in construction, forestry & turf care, produces engines and provides financial solutions to its customers.
Source: Investor Presentation
In mid-May, Deere reported (5/19/23) financial results for the second quarter of fiscal 2023. The company grew its sales 30% over the prior year’s quarter thanks to continued strong demand for farm and construction equipment. Sales grew across the board with the Production & Precision Ag, Small Ag & Turf and Construction & Forestry segments posting gains of 53%, 16%, and 23%, respectively.
Deere grew its earnings-per-share 42%, from $6.81 to $9.65, and beat the analysts’ consensus by a massive $1.01. Thanks to strong business momentum amid robust demand in infrastructure and positive farm fundamentals, Deere raised its guidance for this year, from record earnings of $8.75-$9.25 billion to earnings of $9.25-$9.50 billion.
Click here to download our most recent Sure Analysis report on Deere (preview of page 1 of 3 shown below):
Agriculture Stock #5: Archer-Daniels-Midland (ADM)
- 5-year expected annual returns: 8.8%
Archer-Daniels-Midland is the largest publicly traded farmland product company in the United States. Its businesses include processing cereal grains, oil seeds, and agricultural storage and transportation.
Source: Investor Presentation
Archer-Daniels-Midland reported its first-quarter results on April 25th, 2023. The company had another excellent quarter. The company reported adjusted earnings per share of $2.09 the quarter versus $1.90 in 1Q23, an increase of 9.9% year-over-year.
Revenues were up by 1.8%, from $23.6million in the first quarter of 2022 to $24.1 million. Net income increased from $1,054 million to $1,170 million, or a 11% growth for the quarter compared to the first quarter of 2022.
Click here to download our most recent Sure Analysis report on ADM (preview of page 1 of 3 shown below):
Agriculture Stock #4: Toro Co. (TTC)
- 5-year expected annual returns: 9.7%
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 $4.5 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 second quarter 2023 results on June 8th, 2023. Q2 net sales improved 7% year-over-year to a record $1.34 billion. Adjusted earnings per diluted share increased 26% to $1.58 in Q2 2023. Adjusted operating margin for the quarter was 16.3% compared to 13.8% in the same prior-year period.
Leadership narrowed their fiscal 2023 outlook which guides for net sales growth of 7% to 8% and adjusted EPS in the range of $4.70 to $4.80 per diluted share, a solid 13.1% year-over-year increase at the midpoint.
Click here to download our most recent Sure Analysis report on TTC (preview of page 1 of 3 shown below):
Agriculture Stock #3: Lindsay Corporation (LNN)
- 5-year expected annual returns: 10.8%
Lindsay Corporation provides water management and road infrastructure services in the United States and internationally. The irrigation segment provides irrigation solutions for farmers and contributed 86% of sales in fiscal year 2022. The infrastructure segment helps with road and bridge repairs and contributed the other 14%.
On April 4th, 2023, Lindsay reported Q2 2023 results for the period ending February 28th, 2023.
Source: Investor Presentation
The business saw diluted earnings-per-share of $1.63, beating analyst estimates and rising from $1.32 for the same period last year. Revenues, however, declined 17% year-over-year to $166 million. The revenue decline was due to a sharp drop in irrigation demand, though the company made up for this via rising profit margins and cost-cutting.
Click here to download our most recent Sure Analysis report on Lindsay Corporation (preview of page 1 of 3 shown below):
Agriculture Stock #2: FMC Corporation (FMC)
- 5-year expected annual returns: 12.0%
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 May 2nd, 2023, FMC released its first quarter results for the period ending March 31st, 2022.
Source: Investor Presentation
For the quarter, the company reported revenue of $1.34 billion, an increase of 4% versus the first quarter of 2022, and adjusted earnings per diluted share of $1.77, down 6% versus the same quarter previous year.
First quarter revenue growth was driven by a7% contribution from price and a 3% decline in volume with a 4% currency headwind, especially in EMEA. The company benefited from strong pricing actions, growth of new products, expanded market access, and cost discipline in the quarter.
The highest benefits are coming from North America, sales in North America grew 28% year over year, driven by higher sales of new products, expanded market access and pricing gains.
Click here to download our most recent Sure Analysis report on FMC (preview of page 1 of 3 shown below):
Agriculture Stock #1: Nutrien Ltd. (NTR)
- 5-year expected annual returns: 12.8%
Nutrien Ltd. is a Canadian company formed through Agrium and PotashCorp’s merger in a closed transaction on January 1, 2018. The company produces and markets crop nutrients to agricultural, industrial, and feed customers worldwide.
The company has over 1,700 retail locations in North America, South America, and Australia and is one of the world’s largest manufacturers and suppliers of potash, nitrogen, and phosphate.
Source: Investor Presentation
The company provides over 20% of the global market on potash, 3% nitrogen, and 3% phosphate. Nutrien produced roughly $27.7 billion in revenue in 2021.
On May 10th, 2023, Nutrien reported its first-quarter financial results. Total sales decreased 20% year-over-year. The company reported a decline in its Retail adjusted EBITDA to $(34) million in the first quarter of 2023. The decrease was mainly due to lower sales and gross margins for crop nutrients and crop protection products, which were below normalized levels. This was caused by declining prices and higher cost inventory, which impacted crop nutrient margins. For the quarter, Potash adjusted EBITDA declined to $676 million, which was a result of lower net realized selling prices and lower sales volumes.
Total returns are estimated at 12.8% per year. While we expect no EPS growth, so the 3.5% dividend yield and ~9.3% annual returns from an expanding P/E multiple will fuel future returns.
Click here to download our most recent Sure Analysis report on NTR (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.
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 48 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.