The agricultural sector is experiencing robust transformation driven due to technological innovation, increasing global food demand, and a push toward sustainability. Agriculture stocks, including companies specializing in precision farming technologies and agri-equipment manufacturing, are benefiting from this evolution.

Amid this backdrop, it might be wise to consider investing in fundamentally sound agricultural stocks Yara International ASA (YARIY), Dole plc (DOLE), and ICL Group Ltd (ICL) that are offering long-term growth potential.

In the second quarter of 2024, real GDP increased 3% year-over-year, where agriculture, forestry, fishing, and hunting increased in 29 states and was the leading contributor to growth in 11 states. The global agricultural industry is anticipated to reach $5.52 trillion in 2029, exhibiting a CAGR of 3.8%.

According to Cornell University, global warming has reduced global agricultural productivity by 21%. Global climate change has added urgency to agrarian advancements, with businesses now investing in resilient crop varieties and sustainable farming methods. Furthermore, firms producing machinery capable of withstanding extreme weather are becoming essential for modern agriculture.

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

Stock #3: Yara International ASA (YARIY)

Headquartered in Oslo, Norway, YARIY provides crop nutrition and industrial solutions internationally. It offers ammonium- and urea-based fertilizers, coatings, biostimulants, and organic-based fertilizers, as well as nitrate, calcium nitrate, micronutrient, and fertigation fertilizers.

On November 18, YARIY announced that it signed two agreements with Petrobras for a potential partnership within fertilizers and industrial products, both agreements based on resumed production in Araucaria Nitrogenados S.A. (ANSA), a wholly-owned subsidiary of Petrobras.

Under the first agreement, ANSA will produce an Automotive Liquid Reducing Agent (ARLA 32) and use YARIY’s high-quality automotive grade urea as raw material. The second agreement aims towards achieving greater production efficiency with technical cooperation for the development of joint studies of fertilizers, industrial products, and energy products.

On October 2, YARIY opened its new ammonia import terminal in Brunsbüttel, Germany, which can import up to three million tons of low-emission ammonia annually. This facility aims to support the German hydrogen economy and should strengthen the company’s strategy of contributing toward a low-carbon future.

During the fiscal third quarter that ended September 30, 2024, YARIY’s revenue and other income stood at $3.65 billion. Its operating income grew 147.2% from the year-ago value to $309 million. The company’s net income and earnings per share came in at $286 million and $1.12, up significantly from the prior year’s quarter, respectively. Also, its EBITDA increased 52.1% year-over-year to $604 million.

Analysts expect YARIY’s revenue for the fourth quarter (ending December 2024) to increase marginally year-over-year to $3.62 billion. For the fiscal year 2025, its revenue is expected to grow by 3.9% from the prior year to $14.60 billion.

Moreover, YARIY’s EPS has grown at CAGRs of 1.1% over the past three years. In addition, its levered cash flow increased at 75.5% CAGR over the past five years.

YARIY shares have declined marginally intraday to close the last trading session at $14.06.

YARIY’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

YARIY has a B grade for Value and Stability. It is ranked #3 out of 23 stocks in the Agriculture industry. Click here to see the additional ratings for YARIY (Growth, Momentum, Sentiment, and Quality).

Stock #2: Dole plc (DOLE)

Based in Dublin, Ireland, DOLE engages in sourcing, processing, marketing, and distribution of fresh fruit and vegetables globally.  The company operates through three segments: Fresh Fruit; Diversified Fresh Produce - EMEA; and Diversified Fresh Produce - Americas and ROW. 

On November 11, the company declared a dividend of $0.08 per share, payable on January 3, 2024. DOLE pays an annual dividend of $0.32, which translates to a yield of 2.12% at the current share price. Its four-year average dividend yield is 2.14%.

For the nine-month period that ended on September 30, 2024, DOLE’s net revenue increased 2.2% year-over-year, amounting to $6.31 billion. Its operating income amounted to $245.76 million, increasing 6.4% year-over-year.

In addition, the DOLE’s adjusted net income came in at $105.62 million, up 2.3% year-over-year, while its adjusted EPS valued at $1.11 indicates marginal growth from the year-ago value. Also, the company’s adjusted EBITDA rose 3% from the prior year’s period to $317.59 million.

Street expects DOLE’s revenue for the fiscal year 2025 (ending December 2025) to increase marginally year-over-year to $8.38 billion. Its EPS for the same period is expected to register a 16.1% growth from the prior year, settling at $1.42.

Over the past three and five years, DOLE’s EBITDA grew at CAGRs of 36.5% and 28.5%, respectively, while its EPS grew at 66.9% CAGR over the past five years.

The stock has gained 28.6% over the past year and 29.2% over the past nine months to close the last trading session at $15.10.

It’s no surprise that DOLE has an overall rating of B, equating to a Buy in our POWR Ratings system. It has a B grade for Value and Stability. Out of 23 stocks in the Agriculture industry, DOLE is ranked #2.

Beyond what is stated above, we’ve also rated DOLE for Growth, Momentum, Sentiment, and Quality. Get all DOLE ratings here.

Stock #1: ICL Group Ltd (ICL)

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

On September 25, ICL announced that it signed a memorandum of understanding (MOU) with Orbia Advance Corp., Fluor & Energy Materials, to expand its presence in the North American battery materials supply chain.

In this agreement, ICL will supply Orbia with a phosphorus compound for its use in the production of LiPF6. This partnership allows ICL and Orbia to advance electrification for both transportation and stationary applications, enabling optimization of performance, efficiency, and safety.  

In the same month, ICL opened a new food specialty plant in China to create novel and innovative food offerings tailored to Chinese consumers’ palates. This facility will create solutions for the meat, poultry, and seafood industries, boosting ICL’s innovation and customization and expanding its presence in the Chinese market.

ICL’s sales for the third quarter (ended September 30, 2024) were valued at $1.75 billion. It reported gross profit of $596 million, up marginally year-over-year. The company’s attributable net income came in at $113 million, and its earnings per share stood at $0.09. Also, its total adjusted EBITDA increased 10.7% year-over-year, amounting to $383 million.

The consensus revenue estimate of $7.32 billion for the fiscal year (ending December 2025) represents a 5.5% increase year-over-year. The consensus EPS estimate of $0.44 for the same period indicates an 18.5% improvement year-over-year.

ICL’s revenue has grown at CAGRs of 3.6% and 4.5% over the past three and five years, respectively. Likewise, the company’s EBIT has increased at a CAGR of 68% over the past five years.

Over the past month, the stock has surged 11.1%, closing the last trading session at $4.61.

ICL’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.

It also has an A grade for Value and a B for Stability, Sentiment, and Quality. Within the same industry, it is ranked first. Click here to see ICL’s ratings for Growth and Momentum.

What To Do Next?

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YARIY shares were trading at $14.46 per share on Tuesday afternoon, up $0.40 (+2.84%). Year-to-date, YARIY has declined -17.49%, versus a 28.13% rise in the benchmark S&P 500 index during the same period.

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