Top Agriculture Dividend Stocks for Q4 2022

Agriculture dividend stocks are equities of companies engaged in some aspect of agribusiness and which pay out regular dividends. Agribusiness includes farmers that raise animals and harvest fruits and vegetables, farm equipment manufacturers, processing plants that clean and package livestock for shipping, and chemical producers that develop crop fertilizers.

Companies with a history of paying stable dividends at regular intervals tend to be more established and at a more mature stage of their growth cycle, allowing them to return more of their earnings to shareholders. For investors, these companies can provide a stable source of dividend income even if their stock prices decline sharply with the overall market, which has happened in recent months. However, dividends are not necessarily guaranteed, especially in difficult economic times, such as a bear market or recession. Established companies may cut dividend payments if cash is running low.

Below, we look at the top agriculture dividend stocks in the Russell 1000 by forward dividend yield. Companies with payout ratios that are either negative or in excess of 100% were excluded, because the dividends of such companies are likely not sustainable. A payout ratio that exceeds 100% or is negative (meaning net income is negative) indicates the company may be borrowing to pay dividends. In these two cases, the dividends are at a relatively greater risk of being cut.

Agriculture dividend stocks do not have their own benchmark index, but they are broadly represented by the VanEck Agribusiness ETF (MOO). MOO has outperformed the broader equity market. The index has provided a total return of -3.5% over the past year, above the Russell 1000's total return of -13.1%. These market performance numbers and all statistics below are as of Sept. 15, 2022.

CVR Partners LP (UAN)

• Forward dividend yield: 16.26%
• Payout ratio: 42.09%
• Price: $125.93
• Market cap: $1.3 billion
• 1-year total return: 148.2%

CVR Partners is a company that manufactures and markets nitrogen fertilizer products, which are used to increase the quality and yield of crops. It sells its products on a wholesale basis. CVR Partners' operations include an ammonia unit, a urea ammonium nitrate unit, and a gasifier complex. CVR's latest cash distribution of $10.05 per common unit was paid on Aug. 22, 2022.

ICL Group Ltd. (ICL)

• Forward dividend yield: 8.83%
• Payout ratio: 38.23%
• Price: $8.45
• Market cap: $10.9 billion
• 1-year total return: 26.0%

ICL Group is an Israel-based specialty minerals and chemicals company. It produces a variety of fertilizer products, salts, flame retardants, food additives, and ingredients for personal care products.

Bunge Ltd. (BG)

• Forward dividend yield: 2.74%
• Payout ratio: 18.39%
• Price: $91.20
• Market cap: $13.9 billion
• 1-year total return: 14.9%

Bunge is a global agribusiness and food company. It supplies and transports agricultural commodities, including sugar, ethanol, wheat, and corn. The company also processes oilseeds and grains. Bunge announced on Aug. 11 a quarterly cash dividend of $0.625 per common share. The dividend is payable on Dec. 2 to shareholders as of Nov. 18, 2022.

Tyson Foods Inc. (TSN)

• Forward dividend yield: 2.55%
• Payout ratio: 16.03%
• Price: $72.10
• Market cap: $25.9 billion
• 1-year total return: -3.3%

Tyson Foods produces a range of frozen and refrigerated beef, pork, chicken, and other food products. The company's operations include breeding stock, contract farmers, feed production, processing, marketing, and transportation. On Aug. 11, Tyson announced a quarterly dividend of $0.46 per share on Class A common stock and $0.414 per share on Class B common stock. The dividends are payable Dec. 15 to shareholders as of Dec. 1, 2022.

Fresh Del Monte Produce Inc. (FDP)

• Forward dividend yield: 2.44%
• Payout ratio: 76.82%
• Price: $24.58
• Market cap: $1.2 billion
• 1-year total return: -18.4%

Fresh Del Monte Produce is a producer and distributor of a variety of fresh produce and prepared foods worldwide. The company's offerings include bananas, pineapples, melons, and deciduous fruit, among other similar products.

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