Top Agriculture Stocks

Top agriculture stocks include CF Industries Holdings Inc., Cal-Maine Foods Inc., and American Vanguard Corp. as shares rose as much as 69% in the past year. That contrasts with a 3% drop in the past year of the VanEck Vectors Agribusiness ETF (MOO) and a 16% drop on the Russell 1000 Index.

Here are the top agriculture stocks in three categories: best value, the fastest growth, and the most momentum. The data is as of Dec. 7, 2022.

Best Value Agriculture Stocks

These are the agriculture stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.

^{Source: YCharts}

• Intrepid Potash Inc.: Intrepid is a diversified mineral company that produces fertilizers including muriate of potash, known as potassium chloride. Intrepid announced in November that net income more than tripled year-over-year during the third quarter as sales grew by more than a quarter.
• The Mosaic Co.: Mosaic is a global producer and marketer of concentrated phosphate and potash. The company will pay a quarterly dividend of $0.15 per common share on Dec. 15.
• ICL Group Ltd.: ICL is an Israeli producer of fertilizers and industrial products including flame retardants, phosphates, and food additives. Net income attributable to shareholders tripled on rising sales in the latest quarter, aided by higher commodity prices and production records at its Dead Sea operations.

Fastest Growing Agriculture Stocks

These are the top agriculture stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.

^{Source: YCharts and Nutrien Ltd.}

• Intrepid Potash Inc.: See company description above.
• ICL Group Ltd.: See company description above.
• Benson Hill Inc.: Benson's platform, CropOS, uses predictive breeding and gene editing technology to create food, feed products, and ingredients feeds. The food technology company said on in November that net losses narrowed in the latest quarter, aided by a five-fold increase in revenue thanks to rising sales in its ingredients segment. Note that Benson Hill doesn't have an EPS growth figure in the table above because EPS was negative in the latest quarter.

Agriculture Stocks with the Most Momentum

These are the agriculture stocks that had the highest total return over the last 12 months.

^{Source: YCharts}

• CF Industries Holdings Inc.: CF is a global manufacturer of nitrogen and phosphate fertilizer products. It sells nitrogen-related products including ammonia, urea, urea ammonium nitrate solution, and ammonium nitrate.
• Cal-Maine Foods Inc.: Cal-Maine produces and distributes shell eggs across the U.S. and grades, packages, and markets egg products. It also breeds and grows chicks.
• American Vanguard Corp.: American Vanguard offers specialty chemicals and agricultural products for crop nutrition and protection, commercial and consumer pest control and other uses. The company's Brazilian subsidiary in November received product registration for use of its Counter insecticide for use on soybeans in Brazil, the world's largest agricultural market.

Advantages of Agriculture Stocks

One of the biggest advantages of agriculture investments in general is that people always need to eat, so there will usually be stable demand in the industry. As a result, some investors see this sector as somewhat recession-proof and a good way to diversify a portfolio.

Another benefit from this sector is that farmland real estate investment trusts (REITs) and certain agriculture stocks can provide passive income through regular dividend payouts, as discussed above. In addition, farmland investments may be able to provide a hedge against rising inflation.

Risks of Agriculture Stocks

The agricultural and farming sector as a whole can be unpredictable for investing, as it's subject to several risk factors. Uncertainties from weather to government policies to global commodities markets can cause volatile price and income swings that affect these types of investments. Here are some risks inherent in agriculture investments:

• Production risk: Major weather events, crop diseases, and other factors can affect the quantity and quality of commodities produced.
• Market risk: Global markets for commodities can impact farming and agricultural businesses as prices can swing abruptly, bringing uncertainty to crop production and agribusiness demand.
• Financial risk: Farms and related businesses often use debt to fund operations, so rising interest rates and credit-tightening can be a blow to companies in the industry.
• Regulatory risk: Changes in taxes, regulations, subsidies, and other government moves also can have a negative, or positive, impact on agricultural businesses and investments.

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