Rising food prices, driven by inflation, energy costs, and supply chain issues, along with technological innovations like smart tractors and advanced fertilizers, boost productivity and long-term growth in agriculture. This makes fundamentally strong stocks like Dole plc (DOLE) and ICL Group Ltd (ICL) promising investment opportunities amid increasing food prices.
Despite challenges like high energy costs and extreme weather, advances in robotics, genetic crops, and precision farming are driving agricultural productivity. Alongside, rising global food demand further supports investment in agriculture stocks, particularly in growing markets. The global agriculture market is projected to reach $19.29 trillion by 2028, with a 7.7% CAGR.
Last year, agriculture and related industries contributed $1.53 trillion (5.6%) to U.S. GDP, highlighting its vital role in food security, job creation, and industrial support. This year, the sector benefits from the Biden-Harris Administration’s $2.2 billion Discrimination Financial Assistance Program, along with the USDA's focus on equity and infrastructure, driving growth and resilience.
Furthermore, global population growth and rising food consumption enhance demand for agricultural products, boosting profitability in farming and food production. Emphasizing sustainable practices and food security fosters long-term growth, while agtech innovations like precision farming and AI improve productivity, positioning agriculture as a promising sector.
Now, let’s take a closer look at the fundamentals of the two featured Agriculture stocks, beginning with the second choice.
Stock #2: Dole plc (DOLE)
Headquartered in Dublin, Ireland, DOLE engages in sourcing, processing, marketing, and distributing fresh fruit and vegetables worldwide. The company operates through three segments: Fresh Fruit; Diversified Fresh Produce - EMEA; and Diversified Fresh Produce - Americas and ROW. It offers bananas, pineapples, grapes, berries, avocados, organic produce, cherries, apples, potatoes, and onions.
In terms of the trailing-12-month Return on Common Equity, DOLE’s 14.56% is 37.2% higher than the 10.61% industry average. Similarly, its 1.85x trailing-12-month asset turnover ratio is 116.9% higher than the 0.85x industry average. Its 4.91% trailing-12-month Return on Total Assets is 13.5% higher than the 4.33% industry average.
DOLE reported net revenues of $2.12 billion for the fiscal second quarter ended June 30, 2024. Likewise, its adjusted net income and adjusted earnings per share came in at $47.03 million and $0.49, respectively. Moreover, the company’s adjusted EBITDA for the period increased by 2.2% year-over-year to $125.42 million.
For the quarter ending March 31, 2025, DOLE’s EPS and revenue are expected to increase 8.4% and 2.4% year-over-year to $0.47 and $2.17 billion, respectively. It surpassed the consensus EPS estimates in each of the trailing four quarters. The stock has gained 45.6% over the past year to close the last trading session at $16.86.
DOLE’s positive outlook is reflected in its POWR Ratings. It has an overall rating of B, translating to a Buy in our proprietary rating system. The POWR ratings assess stocks by 118 different factors, each with its own weighting.
It has a B grade for Value, Stability, and Sentiment. It is ranked #2 out of 23 stocks in the Agriculture industry. To see DOLE’s Growth, Momentum, and Quality ratings, click here.
Stock #1: ICL Group Ltd (ICL)
Headquartered in Tel Aviv, Israel, ICL and its subsidiaries operate as a specialty minerals and chemicals company worldwide. It operates in four segments: Industrial Products, Potash, Phosphate Solutions, and Growing Solutions.
On September 24, 2024, ICL announced the opening of a new food specialty plant in China to manufacture solutions for the meat, poultry, and seafood industries. The facility aims to support innovation and customization, strengthening ICL's presence in the Chinese market.
On August 27, 2024, ICL announced a five-year, $170 million distribution agreement with AMP Holdings Group in China to expand its specialty water-soluble fertilizers market. The agreement strengthens ICL’s presence in China's premium agriculture sector, focusing on drip irrigation for high-value crops like apples, watermelons, and strawberries.
In terms of the trailing-12-month EBIT margin, ICL’s 11.02% is 1.4% higher than the 10.87% industry average. Its 6.08% trailing-12-month net income margin is 22.4% higher than the 4.97% industry average. Also, its 3.82% trailing-12-month Return on Total Assets is 62.4% higher than the 2.35% industry average.
During the second quarter ended June 30, 2024, ICL’s sales came in at $1.75 billion, and its adjusted operating income stood at $225 million. The company’s adjusted net income attributable to shareholders and adjusted earnings per share came in at $126 million and $0.10, respectively. Also, its adjusted EBITDA was $377 million.
Street expects ICL’s EPS for the quarter ending March 31, 2025, to increase 25% year-over-year to $0.11. Its revenue for fiscal 2025 is expected to grow 6.8% year-over-year to $7.50 billion. ICL surpassed the Street EPS estimates in each of the trailing four quarters. Over the past three months, the stock has declined 5.8% to close the last trading session at $4.13.
ICL’s POWR Ratings reflect strong prospects. It has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
ICL is ranked first in the Agriculture industry. It has an A grade for Value and a B for Sentiment and Quality. In addition to the POWR Ratings grades I’ve just highlighted, you can see ICL’s ratings for Growth, Momentum, and Stability, here.
What To Do Next?
43 year investment veteran, Steve Reitmeister, has just released his 2024 market outlook along with trading plan and top 11 picks for the year ahead.
ICL shares were trading at $4.09 per share on Wednesday afternoon, up $0.12 (+3.02%). Year-to-date, ICL has declined -16.03%, versus a 21.07% rise in the benchmark S&P 500 index during the same period.
About the Author: Abhishek Bhuyan
Abhishek embarked on his professional journey as a financial journalist due to his keen interest in discerning the fundamental factors that influence the future performance of financial instruments.
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