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 7.3% over the past year, above the Russell 1000’s total return of -2.8%. These market performance numbers and all statistics below are as of June 3, 2022.
Forward dividend yield: 9.81%
Payout ratio: 53.6%
Market cap: $1.3 billion
1-year total return: 124.8%
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.
Forward dividend yield: 4.65%
Payout ratio: 32.1%
Market cap: $14.0 billion
1-year total return: 56.1%
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.
Forward dividend yield: 2.71%
Payout ratio: 40.9%
Market cap: $5.4 billion
1-year total return: -50.6%
The Scotts Miracle-Gro Co. is a manufacturer and marketer of lawn and garden products for consumers in North America and Europe. It sells fertilizers, plant foods, gardening soils, seeds, and pest control products.
Forward dividend yield: 2.41%
Payout ratio: 41.5%
Market cap: $1.2 billion
1-year total return: -27.1%
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.
Forward dividend yield: 2.21%
Payout ratio: 16.9%
Market cap: $17.1 billion
1-year total return: 29.9%
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 in mid-May that its board of directors approved a quarterly cash dividend of approximately $0.63 on its common stock, reflecting a 19% increase. The dividend will be payable on Sept. 2, 2022, to shareholders of record as of August 19, 2022.
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