The agricultural industry is struggling due to financing issues, workforce shortages, market instability, and climate change. However, amid technological advancements and government initiatives, fundamentally strong consumer staple stocks, ICL Group Ltd (ICL), Dole plc (DOLE), and MariMed Inc. (MRMD), could be worth adding to your portfolio now.
The United States Department of Agriculture (USDA) announced a $29 million grant offer to boost American-Made Fertilizer Production.
Additionally, the USDA announced a $46 million investment in the Sustainable Agriculture Research and Education (SARE) program, which has provided farmer-driven, grassroots grants and education programs to farms and ranches in every state and island protectorate since 1988.
Furthermore, the use of modern agricultural technology and a growing population increasing demand should bolster the sector’s long-term growth. The U.S. smart agriculture market is expected to grow at a CAGR of 9.6% until 2027.
The global agricultural industry is estimated to be worth $19.01 trillion in 2027, growing at a 9.1% CAGR.
Let’s delve deeper into the fundamentals of the stocks.
ICL Group Ltd (ICL)
Headquartered in Tel Aviv, Israel, ICL and its subsidiaries are engaged in the fertilizer and specialty chemical sectors. The company operates in three segments: Fertilizers; Industrial Products; and Performance Products. It executes its sale through marketing companies, agents, and distributors.
In terms of trailing-12-month Price/Sales multiple, ICL is trading at 0.95 is 11.7% lower than the industry average of 1.08. In addition, ICL’s trailing-12-month EV/Sales of 1.25x is 16.2% lower than the industry average of 1.49x.
ICL’s trailing-12-month net income margin of 18.85% is 162.6% higher than the industry average of 7.18%. Its trailing-12-month ROTA of 15% is 220.4% higher than the industry average of 4.68%.
ICL’s total current assets came in at $4.74 billion for the period that ended March 31, 2023, compared to $4.55 billion for the period that ended December 31, 2022. Also, its total assets came in at $12.05 billion, compared to $11.75 billion for the same period.
Analysts expect ICL’s EPS to come at $0.88 in 2023. ICL’s shares have gained 2.4% over the past month to close the last trading session at $6.45.
ICL’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
ICL has an A grade for Value and Quality. Within the Agriculture industry, it is ranked #4 out of 26 stocks. Click here for the additional POWR Ratings for Stability, Sentiment, Growth, and Momentum for ICL.
Dole plc (DOLE)
DOLE, headquartered in Dublin, Ireland, engages in sourcing, processing, marketing, and distributing fresh fruit and vegetables. The company operates through four segments: Fresh Fruit; Diversified Fresh Produce – EMEA; Diversified Fresh Produce – Americas and ROW; and Fresh Vegetables.
DOLE’s forward EV/Sales multiple of 0.30 is 82.4% lower than the industry average of 1.69. Its forward non-GAAP P/E of 13.23x is 31% lower than the industry average of 19.17x.
Its trailing-12-month asset turnover ratio of 1.99x is 120.8% higher than the 0.90x industry average.
During the fiscal fourth quarter that ended December 31, 2022, DOLE’s revenue increased 4.7% year-over-year to $2.36 billion. Its gross profit grew 66.6% from the year-ago value to $157.29 million.
The company’s operating income and net income came in at $31.73 million and $13.31 million, compared to an operating loss and net loss of $36.82 million and $24.58 million in the previous year’s quarter, respectively.
DOLE’s EPS is expected to increase 23.5% year-over-year to $1.12 in 2024. It surpassed EPS estimates in three of four trailing quarters. Over the past six months, the stock has gained 30.9% to close the last trading session at $12.04.
It’s no surprise that DOLE has an overall B rating, equating to a Buy in our POWR Ratings system. It has a B grade for Growth, Value, and Stability. It is ranked #3 in the same industry.
Beyond what is stated above, we’ve also rated DOLE for Sentiment, Momentum, and Quality. Get all DOLE ratings here.
MariMed Inc. (MRMD)
MRMD engages in the cultivation, production, and dispensing of medicinal and recreational cannabis in the United States and internationally.
MRMD’s trailing-12-month EV/Sales multiple of 1.62 is 56% lower than the industry average of 3.68. Its trailing-12-month Price/Sales multiple of 1.09 is 73.9% lower than the industry average of 4.17.
MRMD’s trailing-12-month CAPEX/Sales of 8.15x is 75.5% higher than the 4.64x industry average. Its trailing-12-month EBITDA margin of 18.25% is 894.3% higher than the 1.84% industry average.
MRMD’s revenue came in at $34.38 million for the fiscal first quarter that ended March 31, 2023, up 9.9% year-over-year. Also, its current assets came in at $59.37 million for the period that ended March 31, 2023, compared to $44.15 million for the period that ended March 31, 2022.
Its current liabilities came in at $24.51 million, compared to $26.49 million for the same period.
Street expects MRMD’s revenue to increase 11.7% year-over-year to $149.7 billion in 2023. Over the past month, the stock has gained 18.3% to close its last trading session at $0.45.
MRMD’s POWR Ratings reflect its solid prospects. The stock has an overall B rating, translating to Buy in our proprietary rating system.
It also has a B grade for Sentiment and Quality. It is ranked #11 within the same industry. Click here to see the additional ratings for MRMD (Stability, Value, Momentum, and Growth).
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ICL shares were trading at $6.33 per share on Tuesday morning, down $0.12 (-1.86%). Year-to-date, ICL has declined -12.11%, versus a 7.97% rise in the benchmark S&P 500 index during the same period.
About the Author: Rashmi Kumari
Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions.
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