Agricultural dividend stocks are common shares of companies engaged in some aspect of the agricultural business that pay regular dividends. Agribusiness includes farmers who raise animals and raise fruits and vegetables, manufacturers of farm equipment, processing plants that clean and pack 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 tough 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 agricultural dividend stocks in the Russell 1000 by ex-dividend yield. Companies with payout ratios that are negative or above 100% have been excluded, as the dividends of these companies are likely to be unsustainable. A payout ratio that is over 100% or negative (meaning that net income is negative) indicates that the company may be borrowing to pay dividends. In both of these cases, there is a greater risk that the dividends will be reduced.
Agricultural dividend stocks do not have their own benchmark index, but are generally represented by the VanEck Agribusiness ETF (MOO). MOO outperformed the wider equity market. The index has delivered a total return of -3.5% over the past year, above the Russell 1000’s total return of -13.1%. These market performance numbers and all statistics below are as of September 15, 2022.
- Forward dividend yield: 16.26%
- Payout ratio: 42.09%
- Price: $125.93
- Market cap: $1.3 billion
- 1 year total return: 148.2%
CVR Partners is a company that manufactures and markets nitrogen fertilizer products, used to increase crop quality and yield. It sells its products on a wholesale basis. CVR Partners’ operations include an ammonia unit, a urea ammonium nitrate unit, and a gasifier complex. CVR’s most recent cash distribution of $10.05 per common unit was paid on August 22, 2022.
- Forward dividend yield: 8.83%
- Payout ratio: 38.23%
- Price: $8.45
- Market cap: $10.9 billion
- 1 year total return: 26.0%
ICL Group is a specialty minerals and chemicals company based in Israel. It produces a variety of fertilizer products, salts, flame retardants, food additives, and ingredients for personal care products.
- Forward dividend yield: 2.74%
- Payout ratio: 18.39%
- Price: $91.20
- Market cap: $13.9 billion
- 1 year total return: 14.9%
Bunge is a global agriculture and food company. It supplies and transports agricultural commodities, including sugar, ethanol, wheat, and corn. The company also processes oil seeds and grains. Bunge on August 11 announced a quarterly cash dividend of $0.625 per common share. The dividend is payable on December 2 to shareholders as of November 18, 2022.
- Forward dividend yield: 2.55%
- Payout ratio: 16.03%
- Price: $72.10
- Market cap: $25.9 billion
- 1 year total return: -3.3%
Tyson Foods produces a variety of frozen and refrigerated beef, pork, chicken and other food products. The company’s operations include breeding stock, contract farmers, feed production, processing, marketing and transportation. On August 11, Tyson declared a quarterly dividend of $0.46 per share on Class A common stock and $0.414 per share on Class B common stock. The dividends are payable on December 15 to shareholders as of December 1, 2022.
- Forward dividend yield: 2.44%
- Payout ratio: 76.82%
- Price: $24.58
- Market cap: $1.2 billion
- 1 year total return: -18.4%
Fresh Del Monte Produce is a worldwide producer and distributor of various fresh produce and prepared foods. The company’s offerings include bananas, pineapples, melons, and deciduous fruits, among other similar products.
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