Chronicle Journal: Finance

3 Agriculture Stocks to Buy as Global Food Prices RISE: Nutrien, Deere, and Mosaic

Food prices have been rising globally as demand increases. That has lead to more demand for the products and services of agriculture companies. Nutrien (NTR), Deere (DE), and Mosaic (MOS) are three such companies that could see their stocks soar as global food prices rise.

Food prices continue to climb across the globe as demand soars. The demand for food will likely hold steady through the year ahead as consumers focus on the essentials instead of luxuries while the economy recovers.

Across the prior 12 months, each of the half dozen top grocery store food indexes spiked. The meats, fish, poultry, and eggs index have climbed especially high, jumping 4.6% in the past year.

Let's take a look at three agriculture stocks worthy of investors' attention: Nutrien (NTR), Deere (DE), and Mosaic (MOS).

Nutrien (NTR)

Nutrien makes and sells fertilizers along with related feed and industrial products. NTR's primary products are granular potash, ammonium nitrate, nitric acid, nitrogen solutions, ammonia, and phosphoric acid. The company also makes and sells phosphate feet products.

NTR is a POWR Ratings superstar with "A" grades in the Peer Grade, Industry Rank, Buy & Hold Grade, and Trade Grade components. NTR is ranked second out of 36 stocks in the Agriculture industry. NTR is only a dollar and change away from its 52-week high of $55.12, yet it still has a reasonable forward P/E ratio of 23.77.

NTR's solid quarterly earnings are a large part of its recent ascension. The company's latest earnings came in at $1.45 per share, while analysts anticipated $1.37 per share. NTR's primary business of farming supplies and fertilizer will likely thrive amidst the continued pandemic as food prices hold steady or even continue to spike. Add in the fact that worldwide food demand will likely increase by 3% per year in the years to come, and the future looks even brighter for NTR.

If you still aren't convinced NTR is worthy of your investing dollars, consider the fact that it provides a dividend payment of 3.36%.

Deere (DE)

DE is the top maker of agricultural equipment in the world. The company also has a popular agriculture and turf segment. Of the 15 analysts who cover DE, eleven recommend buying, three recommend holding, and only one advises selling.

DE is a POWR Ratings powerhouse with "A" grades in the Peer Grade, Trade Grade, and Buy & Hold Grade components. DE also has a "B" grade in the Industry Rank component. Of the 88 publicly traded companies in the Industrial - Machinery industry, DE is ranked third. DE is trading $8 below its 52-week high of $306.35, yet the stock still has a reasonable forward P/E ratio of 22.54.

The uptick in demand for feed is clearly helping DE move higher and higher. DE's expected earnings growth rate for the year is 50.9%. DE is in a fantastic position for 2021 as the company has invested in smart farming technology that will fuel sales in the year ahead. 

Furthermore, the company is in the midst of a cyclical upswing that will spike sales even more. As long as the prices of crops such as soybean, cotton, wheat, and corn hold steady, DE should rise to new heights in the year ahead.

Mosaic (MOS)

MOS is the top maker and marketer of concentrated potash and phosphate, serving the worldwide agriculture industry. The company is the result of the merger between Cargill's fertilizer business and IMC Global. MOS provides products to customers in more than 40 countries, accounting for around 15% of the world's yearly phosphate production and slightly more than 10% of the world's annual potash production.

A recent ruling issued by the Department of Commerce's International Trade Administration favored MOS, helping the sock move even higher. The ruling will help MOS retain its current sales figures and ultimately charge even higher prices down the line.

MOS is trading one dollar below its 52-week high of $29.33, yet its forward P/E ratio is still below 20. MOS has "A" grades in the Peer Grade, Trade Grade, Industry Rank, and Buy & Hold Grade POWR Rating components. Furthermore, MOS is ranked 5th out of 36 publicly traded companies in the Agriculture industry.

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NTR shares were trading at $52.84 per share on Wednesday morning, down $0.63 (-1.18%). Year-to-date, NTR has gained 9.72%, versus a 2.31% rise in the benchmark S&P 500 index during the same period.

About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.


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