Rising incomes are increasing food consumption, driving demand for more agricultural production. In the U.S., inflation and higher demand are pushing food prices up, creating strong opportunities for agricultural stocks to benefit. As a result, strong agriculture stocks like Yara International ASA (YARIY), Dole plc (DOLE), and ICL Group Ltd (ICL), are well-positioned for gains as global food demand surges.

As the global population grows, food demand is projected to rise by 2.8% annually over the next decade, driven by increased consumption per person. This demand has raised significant investments in agricultural research, focusing on developing disease-resistant crops, improving productivity, and ensuring global food security, making the sector a promising investment opportunity.

Meanwhile, in September 2024, food prices climbed by 0.4%, primarily driven by rising grocery prices for meats and vegetables. This trend indicates that food demand is skyrocketing, as higher prices enhance revenues and profitability for producers. The global agriculture market is projected to reach $19.29 trillion by 2028, with an impressive CAGR of 7.7%, underscoring the sector’s growing importance.

Additionally, agtech innovations, particularly through AI, digital twins, and cloud solutions, are boosting productivity, sustainability, and resilience. These advancements provide essential tools to optimize agricultural practices and ensure food security and market growth. Given these positive trends, let’s examine the fundamentals of the three Agriculture stocks, starting with the third choice.

Stock #3: Yara International ASA (YARIY)

Headquartered in Oslo, Norway, YARIY provides crop nutrition and industrial solutions across Norway, the European Union, Europe, Africa, Asia, North and Latin America, Australia, and New Zealand. The company offers ammonium- and urea-based fertilizers, coatings, biostimulants, organic-based fertilizers, as well as nitrate, calcium nitrate, micronutrient, and fertigation fertilizers.

On October 2, 2024, YARIY inaugurated its new ammonia import terminal in Brunsbüttel, Germany, capable of importing up to three million tonnes of low-emission ammonia annually. This facility aims to support the German hydrogen economy and contribute to the country’s energy transition toward a low-carbon future.

In terms of the trailing-12-month levered FCF margin, YARIY’s 11.18% is 115.6% higher than the 5.19% industry average. Likewise, its 0.88x trailing-12-month asset turnover ratio is 31.8% higher than the 0.67x industry average. Furthermore, its 8.09% trailing-12-month Capex / Sales is 3.6% higher than the 7.81% industry average.

In the fiscal second quarter ended June 30, 2024, YARIY’s revenue and other income amounted to $3.53 billion, while its operating income was $213 million. The company’s net income was $3 million, and its adjusted EBITDA stood at $513 million, representing a year-over-year increase of 103.6%.

Analysts expect YARIY’s revenue for the quarter ending December 31, 2024, to increase 1.3% year-over-year to $3.66 billion. YARIY’s stock has gained 6.1% over the past three months to close the last trading session at $15.13.

YARIY’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 an A grade for Growth and a B for Value and Stability. It is ranked #3 out of 23 stocks in the Agriculture industry. To access other ratings of YARIY for Momentum, Sentiment, and Quality, click here.

Stock #2: 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 14.56% is 40% higher than the 10.40% industry average. Similarly, its 1.85x trailing-12-month asset turnover ratio is 121.1% higher than the 0.83x industry average. Its 4.91% trailing-12-month Return on Total Assets is 18.9% higher than the 4.13% industry average.

DOLE reported net revenues of $2.12 billion for the fiscal second quarter ended June 30, 2024. Likewise, its adjusted net income and adjusted earnings per share came in at $47.03 million and $0.49, respectively. Moreover, the company’s adjusted EBITDA for the period increased by 2.2% year-over-year to $125.42 million.

For the quarter ending March 31, 2025, DOLE’s EPS is expected to increase 5.7% year-over-year to $0.45. For fiscal 2024 its revenue is expected to rise marginally year-over-year to $8.27 billion. It surpassed the consensus EPS estimates in each of the trailing four quarters. The stock has gained 48% over the past year to close the last trading session at $15.67.

DOLE’s bright outlook is reflected in its POWR Ratings. It has an overall rating of B, translating to a Buy in our proprietary rating system.

It has a B grade for Value and Stability. It is ranked #2 in the same industry. To see DOLE’s Growth, Momentum, Sentiment, and Quality ratings, click here.

Stock #1: 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 September 25, 2024, ICL announced a partnership with Orbia to supply a phosphorus compound for making LiPF6 battery materials, strengthening their position in North America’s battery supply chain.

On September 24, 2024, ICL announced the opening of a new food specialty plant in China. This facility will create solutions for the meat, poultry, and seafood industries, boosting ICL’s innovation and customization while expanding its presence in the Chinese market.

In terms of the trailing-12-month EBIT margin, ICL’s 11.02% is 1.7% higher than the 10.84% industry average. Its 6.08% trailing-12-month net income margin is 20.6% higher than the 5.04% industry average. Also, its 3.82% trailing-12-month Return on Total Assets is 64.6% higher than the 2.32% industry average.

During the second quarter ended June 30, 2024, ICL’s sales came in at $1.75 billion, and its adjusted operating income stood at $225 million. The company’s adjusted net income attributable to shareholders and adjusted earnings per share came in at $126 million and $0.10, respectively. Also, its adjusted EBITDA was $377 million.

Street expects ICL’s EPS for the quarter ending March 31, 2025, to increase 27.8% year-over-year to $0.12. Its revenue for fiscal 2025 is expected to grow 6.3% year-over-year to $7.38 billion. ICL surpassed the Street EPS estimates in each of the trailing four quarters. Over the past month, the stock has gained 8.7% to close the last trading session at $4.13.

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

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

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YARIY shares were trading at $15.16 per share on Tuesday afternoon, down $0.19 (-1.24%). Year-to-date, YARIY has declined -13.49%, versus a 23.94% rise in the benchmark S&P 500 index during the same period.

About the Author: Abhishek Bhuyan

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. More...

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