The agriculture market is expected to experience growth due to shifting consumer preferences toward healthier and diverse diets. Moreover, rising population growth and evolving dietary habits are expected to augment the growth in the agriculture industry.
Given the industry’s bright prospects, it could be wise to invest in fundamentally strong agriculture stocks, Nutrien Ltd. (NTR), ICL Group Ltd (ICL), and Dole plc (DOLE) amid rising food prices.
In recent years, the demand for crops and livestock products has surged, leading to the expansion of agricultural markets. This rising demand is fueled by factors such as population growth, evolving dietary habits, and urbanization. The gross production value in the agriculture market is projected to grow at a CAGR of 5.8% by 2029.
Furthermore, the average price of food in the United States increased 2.1% in the 12 months ended May, after an annual increase of 2.2% in April, according to the U.S. Labor Department’s Bureau of Labor Statistics. Moreover, the world’s population is growing and is expected to reach 10 billion by 2050, which should boost demand in the sector.
Given these encouraging trends, let’s look at the fundamentals of the top Agriculture stocks, beginning with the third choice.
Stock #3: Nutrien Ltd. (NTR)
Headquartered in Saskatoon, Canada, NTR provides crop inputs and services. The company operates through four segments: Retail; Potash; Nitrogen; and Phosphate.
NTR’s trailing-12-month gross profit margin of 29.64% is 4.4% higher than the industry average of 28.39%. Likewise, the stock’s trailing-12-month EBITDA margin of 18.08% is 9.9% higher than the industry average of 16.45%.
NTR’s sales for the fiscal first quarter that ended March 31, 2024, amounted to $5.39 billion. Its adjusted EBITDA came to $1.06 billion. Moreover, its gross margin amounted to $1.54 billion. The company’s adjusted net earnings stood at $230 million and $0.46 per share, respectively.
Analysts expect NTR’s revenue and EPS for the third quarter (ending September 2024) to increase marginally and 72.1% year-over-year to $5.42 billion and $0.60, respectively.
Shares of NTR have plunged 6.3% over the past three months to close the last trading session at $50.91.
NTR’s solid fundamentals are reflected in its POWR Ratings. The stock has an overall rating of C, which translates to a Neutral in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
NTR has a B grade for Growth and Value. NTR is ranked #4 among 26 stocks in the Agriculture industry.
Click here to access additional NTR ratings (Momentum, Sentiment, Quality, and Stability).
Stock #2: ICL Group Ltd (ICL)
Headquartered in Tel Aviv, Israel, ICL operates as a specialty minerals and chemicals company worldwide. It operates in four segments: Industrial Products; Potash; Phosphate Solutions; and Growing Solutions.
ICL’s trailing-12-month levered FCF margin of 9.54% is 83.2 higher than the industry average of 5.24%. Also, its trailing-12-month gross profit margin of 33.29% is 18% higher than the industry average of 28.21%.
In the fiscal fourth quarter that ended December 31, 2023, ICL’s sales and adjusted operating income stood at $1.74 billion and $215 million, respectively. Moreover, its total adjusted EBITDA stood at $362 million. For the same quarter, its adjusted net income attributable to the company’s shareholders and adjusted earnings per share stood at $118 million and $0.09, respectively.
Analysts predict ICL’s revenue for the fiscal year ending December 2025 to increase 6.3% year-over-year to $7.40 million. Its EPS for the same quarter is expected to increase 26.8% year-over-year to $0.45. Moreover, the company has an excellent earnings surprise history, surpassing consensus EPS estimates in each of the trailing four quarters.
Over the past three months, ICL’s stock has plunged 20.5% to close the last trading session at $4.28.
ICL’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
ICL has an A grade for Value and a B for Quality, Sentiment, and Stability. It is ranked #2 in the same industry.
In addition to the POWR Ratings we’ve stated above, we also have ICL ratings for Momentum and Growth. Get all ICL ratings here.
Stock #1: Dole plc (DOLE)
Based in Dublin, Ireland, DOLE is involved in the sourcing, processing, marketing, and distribution of fresh fruit and vegetables worldwide. The company operates through four segments: Fresh Fruit; Diversified Fresh Produce – EMEA; Diversified Fresh Produce – Americas and ROW; and Fresh Vegetables.
DOLE’s trailing-12-month asset turnover ratio of 1.83x is 116.8% higher than the industry average of 0.84x. Similarly, its trailing-12-month ROCE of 15.64% is 39.2% higher than the industry average of 11.24%.
During the first quarter that ended March 31, 2024, DOLE’s revenue increased 6.5% year-over-year to $2.12 billion. The company’s adjusted EBITDA rose 9.7% year-over-year to $110.10 million. Also, net income attributable to DOLE came in at $40.60 million and $0.43 per share, up 25.7% and 26.5% from the prior year’s quarter, respectively.
Street expects DOLE’s fiscal 2025 EPS to increase 18.2% year-over-year to $1.39. Its revenue for the same year, is expected to grow 1.7% year-over-year to $8.33 billion. The company surpassed consensus EPS estimates in each of the trailing four quarters.
DOLE has gained 2.6% over the past three months, closing the last trading session at $12.24.
DOLE’s POWR Ratings reflect its promising outlook. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
The stock has an A grade for Value and a B for Quality, Stability, and Sentiment. Within the same industry, DOLE is ranked first in the same industry.
Click here to access additional ratings of DOLE for Growth and Momentum.
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NTR shares were unchanged in premarket trading Monday. Year-to-date, NTR has declined -6.78%, versus a 15.22% rise in the benchmark S&P 500 index during the same period.
About the Author: Nidhi Agarwal
Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
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