As food demand rises with growing population, the global agriculture market is thriving by investing in technology and sustainability for future growth. Despite challenges like declining arable land and soil erosion, advances in robotics and precision farming are boosting productivity. Additionally, innovations in genetic crops and other technologies are helping meet demand and drive sector growth.

Amid this backdrop, it could be wise to buy fundamentally strong agriculture stocks Nutrien Ltd. (NTR), ICL Group Ltd (ICL), and Dole plc (DOLE).

Agriculture is vital to the economy, ensuring food security, providing jobs, and supporting industrial products. It boosts economic growth through food sales and research. In 2023, agriculture and related industries contributed $1.530 trillion to U.S. GDP, or 5.6%. Hence, trends like technology adaptation and emerging markets offer investment opportunities in agriculture.

In 2024, the agriculture sector benefits from the Biden-Harris Administration’s $2.2 billion Discrimination Financial Assistance Program. This aid, along with the USDA’s focus on equity and infrastructure, is set to boost growth and resilience. Additionally, advancements in technology for shipping agricultural products are improving efficiency, supply chain visibility, and global collaboration, driving sector success.

Furthermore, sustainable agricultural practices are boosting crop yields and reducing food waste. Smart farming technologies, such as drones, robotic harvesters, and IoT devices, along with advancements in fertilizers, supplements, and efficient equipment, are modernizing agriculture and improving market prospects. The global agriculture market is projected to reach $19.29 trillion by 2028, growing at a 7.7% CAGR.

Now, let’s take a closer look at the fundamentals of the three featured Agriculture stocks, beginning with the third choice.

Stock #3: Nutrien Ltd. (NTR)

Headquartered in Saskatoon, Canada, NTR provides crop inputs and services through four segments: Retail, Potash, Nitrogen, and Phosphate. The Retail segment distributes crop nutrients, crop protection products, seeds, and merchandise.

On May 8, 2024, NTR announced a quarterly dividend of $0.54 per share, payable on July 19, 2024, to shareholders of record on June 28, 2024. The dividend will be paid in either Canadian or US dollars, depending on the residency of the shareholder.

In terms of the trailing-12-month EBITDA margin, NTR’s 18.08% is 9% higher than the 16.60% industry average. Likewise, its 7.58% trailing-12-month levered FCF margin is 43.4% higher than the 5.29% industry average. Furthermore, its 8.71% trailing-12-month Capex / Sales is 12.9% higher than the 7.72% industry average.

In the fiscal first quarter ending March 31, 2024, NTR’s sales amounted to $5.39 billion. Similarly, its gross margin was $1.54 billion. The company’s adjusted net earnings were $230 million, or $0.46 per share. Its adjusted EBITDA stood at $1.06 billion. In addition, NTR’s total assets as of March 31, 2024, amounted to $53.58 billion, compared to $52.75 billion as of December 31, 2023.

Analysts expect NTR’s EPS for the quarter ending September 30, 2024, to increase 64.7% year-over-year to $0.58. Its revenue for the same quarter is expected to rise marginally year-over-year to $5.38 billion. NTR’s stock has declined marginally over the past month to close the last trading session at $49.89.

NTR’s positive outlook is reflected in its POWR Ratings. It has an overall rating of B, translating to a Buy in our proprietary rating system. The POWR ratings assess stocks by 118 different factors, each with its own weighting.

It has a B grade for Growth and Value. It is ranked #6 out of 26 stocks in the Agriculture industry. To see NTR’s Momentum, Stability, Sentiment, and Quality ratings, click here.

Stock #2: ICL Group Ltd (ICL)

Headquartered in Tel Aviv, Israel, ICL and its subsidiaries operate as a specialty minerals and chemicals company worldwide. It operates in four segments: Industrial Products, Potash, Phosphate Solutions, and Growing Solutions.

On July 29, 2024, ICL announced its acquisition of Custom Ag Formulators (CAF) for approximately $60 million. This move aims to enhance ICL's specialty plant nutrition offerings in North America and expand its Growing Solutions product line.

In terms of the trailing-12-month EBIT margin, ICL’s 12.09% is 13.2% higher than the 10.68% industry average. Similarly, its 6.65% trailing-12-month net income margin is 31.6% higher than the 5.05% industry average. Also, its 4.14% trailing-12-month Return on Total Assets is 55.9% higher than the 2.66% industry average.

During the first quarter ended March 31, 2024, ICL’s sales came in at $1.74 billion, and its adjusted operating income stood at $215 million. The company’s adjusted net income attributable to shareholders and adjusted earnings per share came in at $118 million and $0.09, respectively. Also, its adjusted EBITDA was $362 million.

Street expects ICL’s revenue for the quarter ending December 31, 2024, to increase 10.1% year-over-year to $1.86 billion. Its EPS for fiscal 2025 is expected to grow 24.4% year-over-year to $0.44. ICL surpassed the Street EPS estimates in each of the trailing four quarters. Over the past month, the stock has declined 2.2% to close the last trading session at $4.07.

ICL’s POWR Ratings reflect strong prospects. It has an overall rating of B, which translates to a Buy in our proprietary rating system.

It is ranked #2 in the same industry. It has an A grade for Value and a B for Stability and Quality. In addition to the POWR Ratings grades I’ve just highlighted, you can see ICL’s ratings for Growth, Momentum, and Sentiment, here.

Stock #1: Dole plc (DOLE)

Headquartered in Dublin, Ireland, DOLE engages in sourcing, processing, marketing, and distributing fresh fruit and vegetables worldwide. The company operates through three segments: Fresh Fruit; Diversified Fresh Produce - EMEA; and Diversified Fresh Produce - Americas and ROW. It offers bananas, pineapples, grapes, berries, avocados, organic produce, cherries, apples, potatoes, and onions.

In terms of the trailing-12-month Return on Common Equity, DOLE’s 15.64% is 43.3% higher than the 10.91% industry average. In addition, its 1.83x trailing-12-month asset turnover ratio is 110.9% higher than the 0.87x industry average.

DOLE’s net revenues for the fiscal first quarter ended March 31, 2024, grew 6.6% year-over-year to $2.12 billion. Its adjusted net income increased 25.6% over the previous year’s quarter to $40.55 million and adjusted earnings per share rose 26.5% year-over-year to $0.43. Additionally, its adjusted EBITDA for the period increased 9.7% year-over-year to $110.10 million.

For fiscal 2025, DOLE’s EPS and revenue are expected to increase 19.6% and 6.2% year-over-year to $1.40 and $8.74 billion, respectively. It surpassed the consensus EPS estimates in each of the trailing four quarters. The stock has gained 30.4% over the past nine months to close the last trading session at $14.76.

It’s no surprise that DOLE has an overall rating of A, which translates to a Strong Buy in our POWR Ratings system.

It has a B grade for Value, Stability, Sentiment, and Quality. It is ranked first in the Agriculture industry. To access the additional ratings of DOLE for Growth and Momentum, click here.

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NTR shares were trading at $47.78 per share on Friday afternoon, down $2.11 (-4.23%). Year-to-date, NTR has declined -11.58%, versus a 12.51% rise in the benchmark S&P 500 index during the same period.

Abhishek embarked on his professional journey as a financial journalist due to his keen interest in discerning the fundamental factors that influence the future performance of financial instruments.

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