10 Best Agriculture Stocks To Buy

Disruptive innovation makes for exciting investments. Everyone wants to be in on the next Alphabet, Amazon, or Apple, and it’s easy to overpay for companies that might be developing the technology of the future. Of course, any company exploring transformative technology is a risky investment. For every success story, there are dozens of failures. Shareholders who relied on those stocks to deliver substantial returns end up with losses instead. 

Top investors know that putting a portion of their portfolio into recession-proof industries is a smart move, even though these industries lack the glamor of new technology. Energy stocks are a popular choice, along with utilities and consumer staples. 

Agriculture stocks don’t get as much attention, but that’s not a reflection of their quality. They are simply overlooked, despite the fact that the agriculture industry is responsible for the world’s food supply. In addition to producing and processing various commodities, agricultural companies manufacture the pesticides and fertilizers that make healthy crops possible. Including some of the best agriculture stocks in a portfolio ensures a measure of stability because food is always in demand. 

Choosing the best agriculture stocks to buy comes down to a few basic points. Which agriculture companies are profitable? Which ones reward shareholders with dividends? And which have the resources to navigate complex and constantly-changing global economic conditions? These are ten to consider. 

AGCO Corporation

AGCO was founded in 1990, making it a relative newcomer to the agriculture space. In that time, it has grown from a tiny operation to a $9.36 billion company, and the stock has gone up a whopping 2,575 percent. AGCO makes the tools and equipment farmers need to increase efficiency and boost production, including self-propelled sprayers, seeding equipment, smart farming technology, tractors, foragers, and combines. 

AGCO reported its second-quarter results on July 27, 2023, and by nearly all measures, it is shaping up to be a good year. Net sales hit $3.8 billion, a record for the company and an increase of almost 30 percent year-over-year. Operating margin came in at 13 percent, which is another record-breaking achievement for AGCO. Better still, earnings per share totaled $4.29 for the quarter – a full $0.57 per share over consensus estimates.

Based on these factors, leadership increased guidance for full-year operating margin, sales, and earnings per share. AGCO stock sells at a price-to-earnings ratio of 8.43, which is reasonable for the industry. It is committed to returning value to shareholders, and it regularly pays out dividends. The current dividend yield is 0.93 percent. In short, AGCO stock is a buy. 

Archer-Daniels-Midland (ADM)

Archer-Daniels-Midland, better known as ADM, has been around since 1902. It was originally founded in Minneapolis, MN, alongside other major players in the food industry, such as Pillsbury and General Mills. Today, ADM calls Chicago home, and it has grown into a multinational food processing business. In addition to food for people, it produces food for pets and other animals. 

ADM stock is up 68 percent in the past five years and nearly four percent over the past six months. That’s respectable, given the challenges facing the industry as a whole. The company held its second-quarter earnings call on July 25, 2023, and though it didn’t see much in the way of growth, it did have one important win. For Q2 2023, ADM delivered earnings per share of $1.70. Adjusted earnings per share came in at $1.89. 

ADM trades at a price-to-earnings ratio of 11.34, and its current dividend yield is 2.12 percent. The average 12-month target price for ADM stock is around $99 per share, which would be a solid profit for investors who buy ADM stock now. 

Benson Hill, Inc.

There’s no gentle way to say it. Benson Hill is having a tough time. Benson Hill stock is down more than 75 percent over the past year, and shares currently trade for less than a dollar apiece. Usually, that sort of performance means the stock should be avoided at all costs. However, in this case, the issues aren’t due to mismanagement or a failed product. Benson Hill is simply facing the ups and downs that come along with being a relatively new business. 

Benson Hill has only been around since 2012. It was founded with a mission to disrupt the soybean market. Benson Hill Ultra-High Protein soybeans are grown in the United States, and they are suitable for baked goods as well as products designed as alternatives to meat and dairy. 

The biggest advantage to Benson Hill soy products vs. traditionally farmed and manufactured soy is sustainability. Benson Hill’s portfolio of ingredients use up to 70 percent less water than traditional soy without sacrificing nutrition or flavor. The benefits of Benson Hill soy have attracted key partners. In fact, ADM is working with Benson Hill to scale production. 

Benson Hill is one of the riskier agriculture stocks based on its recent financials – and the fact that it currently operates at a loss. However, investors who are willing to accept that risk and buy Benson Hill stock may position themselves for above-average rewards over the next few years. 

Bunge Limited

Bunge Limited can trace its roots back to 1818 when it was originally founded in the Netherlands. Now, the company is headquartered in St. Louis, Missouri, where it operates a market-leading business in soybean exports, food processing, fertilizer, and grain trading. 

Bunge had a banner year in 2022, as a variety of world events decreased the food supply. The Russian invasion of Ukraine had a particularly large impact on the availability of grains and certain oils, and Bunge has been hard at work to close the gap between supply and demand.

These efforts came with financial rewards. Bunge saw record results for 2022, including $67.2 billion in revenue and net income of $1.6 billion. Based on the second-quarter results announced August 2, 2023, it appears this is going to be another good year. 

For the second quarter, revenues are down a bit – but profits are up considerably. Earnings per share totaled $4.09 as compared to Q2 2022’s $1.34. Adjusted earnings per share came in at $3.72 vs. the previous period’s $2.97 per share. During the second-quarter earnings call, Bunge leaders said they expect full-year earnings per share of at least $11.75. 

Bunge stock trades at a price-to-earnings ratio of 8.72, and the company pays dividends reliably. Right now, the dividend yield is 2.35 percent. That’s one of the reasons most analysts have rated Bunge Limited stock a buy. 

CF Industries Holdings Inc

Every company is focused on increasing efficiency and boosting production to encourage greater profits, and agriculture companies are no exception. The ones in the business of farming grain, produce, and other crops want to grow more in less time without expanding land use. Advanced fertilizers make that possible, and CF Industries is a leader in that space. 

CF Industries was founded in 1946, and it operates out of Deerfield, Illinois. Its primary focus is nitrogen fertilizer, though it does have other divisions producing related products. Since the stock started trading publicly, it has returned over 2,000 percent, and it hit its all-time high in August 2022. 

Over the past 12 months, CF Industries stock went down approximately 24 percent and reached its lowest point in early June 2023. The issues facing the company are almost entirely external – for example, lower nitrogen prices and higher natural gas prices. Those factors contributed to poor results for the first quarter of 2023, and shareholders responded accordingly. 

Since June, the stock has been on a steady upward trajectory, and roughly a third of the analysts who made a prediction about the company’s prospects have rated CF Industries stock a buy. The remaining two-thirds are concerned about the continued poor performance through the second quarter. 

On August 2, 2023, the company announced second-quarter and mid-year results. For the first half of the year, earnings per share totaled $1.09 billion, or $5.55 per diluted share – significantly less than the $2.05 billion, or $9.78 per diluted share reported for the first half of 2022.

Though analysts generally agree that the company will turn things around when conditions are better, they aren’t certain when that will occur. As a result, they are divided in their CF Industries stock rating. CF Industries trades at a price-to-earnings ratio of less than seven percent, and its current dividend yield totals just over two percent. 

Deere & Company

When it comes to reliable, high-quality agricultural equipment, there is only one brand that matters: Deere & Company. No one else in the industry comes close in terms of consumer loyalty. Deere also has a strong presence in the turf, forestry, and construction markets, with heavy-duty machines capable of moving earth, building roads, and harvesting timber. 

On top of that, Deere & Company pulls in substantial profits from its financial services segment. Not only does the company make money on its machines – it also keeps interest on equipment loans in-house. 

Deere & Company gets its name from founder John Deere, who launched the business back in 1837. From the time it started trading publicly, Deere has delivered solid returns for shareholders, but after the market crash of 2020, Deere & Company stock really took off. Over the past five years, Deere stock gained approximately 180 percent – almost four times the S&P 500’s gains. Most analysts agree that Deere & Company stock is a buy. 

Deere & Company trades at a price-to-earnings ratio of just over 14, and its dividend yield is currently 1.19 percent. 

FMC Corporation

Flowers, food, and other crops shouldn’t be hard to grow. After all, it’s a simple matter of planting seeds and watering them – right? Unfortunately, it’s not that simple – especially when the goal is large-scale production. No matter how large or small the farm, there are critters and insects ready to steal their share. In some cases, it’s just a nuisance. In others, an entire crop can be decimated. 

On top of that, plants can fall victim to a wide variety of diseases – some highly contagious – just like animals and people. To make matters worse, hardy weeds grow bolder and stronger in areas where there are fertilizers and irrigation, and they have no compunction about taking over land and choking out carefully planted crops. 

FMC Corporation battles against pests, weeds, and diseases that threaten the health of agricultural products. That includes a collection of insect control solutions, as well as herbicides for weeds, fungicides, and other methods of disease prevention. 

FMC was founded in 1883, and it started trading on the public exchange in 1986. Since then, it has delivered returns of almost 4,000 percent. FMC Corporation stock peaked in April 2022 at more than $138 per share. After April 2022, FMC stock has had a series of upswings and downturns, but it has all been downhill since April 2023. First-quarter results didn’t meet expectations, and in June 2023, business leaders reduced their estimates for second-quarter and full-year results. 

Leaders pointed to the company’s distribution partners when explaining the adjusted guidance. They explained that while demand from end users remains strong, distributors have reduced their inventories in a rapid manner. In a press release, the company said: 

Abrupt and unprecedented reductions in inventory by growers and the distribution channel led to significant volume decline despite steady on-the-ground consumption. 

This had a significant impact on FMC’s revenue for the second quarter, and it will continue to drive revenues down for the remainder of the year. 

Needless to say, share prices dropped precipitously after the announcement in early June, and they declined further after the second-quarter earnings call. However, analysts have indicated they see an opportunity in the current pricing. They expect FMC stock to recover over the next 12 months, and when it does, those who buy FMC Corporation stock now will enjoy enhanced returns. 

FMC Corporation currently trades at a price-to-earnings ratio of 18.09, and its dividend yield is 2.61 percent. 

Nutrien Ltd

In its current form, Canada’s Nutrien is only five years old, but its components have been around much longer. Nutrien was created when Agrium and Potash Corporation merged in 2018, and the combined company produces several crucial agriculture products, including seed, fertilizer, and several lines of crop protection solutions. Thanks to the merger, Nutrien is the world’s top potash producer, and it is the third-largest nitrogen fertilizer in the world. 

As fertilizer prices went up in 2021 and 2022, Nutrien’s revenues increased significantly. The company had a particularly impressive 2022, ending the year at $37.9 billion in revenue, a year-over-year increase of 37 percent, and net income of $7.7 billion, a year-over-year increase of 142 percent. 

Nutrien leadership is optimistic about 2023, though they said the year will not be as impressive as 2022. The expected year-over-year decline has pushed share prices down. Nutrien stock has lost around 14 percent of its value year-to-date. The second-quarter earnings call didn’t help matters, as leaders revised their guidance to account for lower global potash prices than they had originally calculated. 

Nutrien has a solid plan for cutting expenses while it works to get revenues up. Key tactics include pausing planned increases in annual potash production capabilities, suspending work on a large and costly project related to the production of clean ammonia, and reducing or eliminating planned capital projects. 

Analysts are somewhat evenly split on whether Nutrien stock is a buy or a hold. Given the ongoing demand for fertilizer and crop protections – and the fact that demand is expected to increase steadily – investors willing to take on some risk may be rewarded with strong long-term returns. 

Scotts Miracle-Gro Company

Massive agriculture companies have taken on responsibility for supplying food to those who can’t grow their own. Residents of large cities, for example, lack the space necessary to feed their families from a home garden. However, plenty of people still want to grow their own produce, flowers, trees, and bushes – not to mention lush lawns and other types of landscaping. 

Container gardening and vertical gardening have gained popularity among those who have space constraints, and many cities have introduced community gardens. Scotts Miracle-Gro Company makes that possible with advanced lawn care products, fertilizers, seeds, and other solutions designed specifically for retail consumers. 

When the COVID-19 pandemic sent everyone home, Scotts Miracle-Gro was an unexpected winner. Consumers spent more time making their homes an oasis of comfort, and both indoor and outdoor gardening and lawn care took off. In the spring of 2021, Scotts Miracle-Gro stock hit an all-time high of around $250 per share before drifting back down to pre-pandemic prices. It hit a low of roughly $39 per share in October 2022, and there has been a series of ups and downs since. 

Year-to-date, Scotts Miracle-Gro stock is about even with its starting price, but a loyal contingent of shareholders haven’t given up hope. Scotts Miracle-Gro leads its category, and it has a healthy dividend yield of 5.29. That alone is enough for some investors to consider Scotts Miracle-Gro stock a buy. 

The Mosaic Company

No one disputes that fertilizers increase crop yields, but the question is, by how much? The Mosaic Company has done the calculations and has determined that without its potash and phosphates products, customers’ crop yields would be down by 50 percent or more. The Mosaic Company ensures soil stays healthy by mining, producing, and distributing high-quality solutions for commercial farmers. 

Like its agriculture industry peers, Mosaic stock peaked in April 2022. It has since declined, but not unreasonably when external factors are considered. Year-to-date, Mosaic Company stock is down just under eight percent, but it’s starting to recover despite losses reported for the second quarter. 

The Mosaic Company released its second-quarter 2023 earnings on August 1, 2023. Highlights include: 

• Revenue – $3.4 billion, a decrease of 37 percent year-over-year
• Gross Margin – 16.8 percent, a decrease from 34.4 percent during the prior year period
• Net Income – $369 million, down from $1 billion during the prior year period 
• Adjusted EBITDA – $744 million, down from $2 billion during the prior year period

Though product prices have gone down, the cost of materials is dropping, too. This, combined with expense reduction tactics, suggests The Mosaic Company will regain its financial strength. If so, Mosaic Company stock will go up. 

The Mosaic Company stock trades at a price-to-earnings ratio of 6.20, and the current dividend yield is 2.04 percent.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.