Food prices have reached a decade high in 2021 and keep rising. One way to benefit from it is to invest in agribusinesses.
Inflation spreads in the developed world due to the monetary and fiscal stimulus provided in response to the COVID-19 pandemic. In 2021, the food price index reached a 10-year high – the fastest pace of food-price inflation since 2008.
The phenomenon is widespread. In the United States, inflation runs near a four-decade high, and higher inflation is “exported” to its trading partners.
The most recent example comes from the United Kingdom. In an interview with BBC, Tesco’s chairman warned that the worst of food price rises is “yet to come.”
In light of such developments, investors may adjust their portfolio holdings by adding businesses with exposure to the agriculture sector. Here are the best four agribusiness stocks to buy amid food price inflation: Zoetis, Deere & Company, Archer-Daniels-Midland, and Tyson Foods.
Zoetis (NYSE:ZTS) is an American company headquartered in Parsippany, New Jersey. It offers various agribusiness services, precision livestock farming, and animal health medicines, to name just a few of the areas it is active in.
This is a company paying dividends – the forward dividend yield is 0.65%, and Zoetis increased the annual dividend for the past eight consecutive years. Besides the quarterly dividend, Zoetis’ investors saw the stock price increase by +26.99% in the last twelve months.
Deere & Company
Deere (NYSE:DE) is an American company operating in the agricultural and farm machinery industry. Its EBIT margin for the past twelve months is much higher than the sector median (18.41% vs. 9,59%) and it pays a dividend too.
Archer-Daniels-Midland (NYSE:ADM) is an American company from Chicago, Illinois. Founded in 1902, it operates in the agricultural products industry, and it is a merchandiser of agricultural commodities, among others.
Its revenues grow much higher than the sector median by 262.86%, and the stock price is at all-time highs. In addition, Archer-Daniels-Midland pays a quarterly dividend and has increased its annual dividend payments for the past twenty-eight consecutive years.
Tyson Foods (NYSE:TSN) is an American company active in the packaged foods and meats industry. It employs over 130,000 people worldwide, and it reported its quarterly earnings today. Revenue crushed estimates, and the stock price is up by more than 10% as a result.
The company has an attractive valuation as its P/E Non-GAAP ratio trailing twelve months is lower than the sector median by 41.76%.