4 Hot Agriculture Dividend Stocks
- August 18, 2010
- Dividend Investing, Dividend Stocks, Top Dividend Stocks
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Agriculture stocks have been white hot this month. Just days ago, Russia announced a ban on grain exports as the fourth-largest exporter has seen their crops devastated by fires and extreme drought. Food products and agriculture stocks have naturally benefited from the announcement. Take a look at these performances since the end of June:
Potash – up 72%
Mosaic – up 50%
Agrium – up 42%
CF Industries – up 42%
Bucyrus International – up 30%
Monsanto – up 28%
Joy Global – up 20%
Monsanto – up 19%
Agriculture stocks received a further boost this week with BHP Billiton (BHP: 79.62 -1.37%) making an unsolicited bid for Potash (POT: 45.87 -1.27%). Potash has declined the offer, but their shares have climbed 41% this month. The takeover news has also lifted other fertilizer stocks with competitors Mosaic (MOS: 56.00 -0.41%) up 22% in August.
With all of the attention that is being given to agriculture stocks these days, it behooves dividend investors to follow the money. While rising stock prices have pushed dividend yields down in the agriculture sector, there are still some hot agriculture dividend stocks available.
Of course simply selecting the highest yielding stock in the sector isn’t a great investment strategy. Cal-Maine Foods (CALM: 38.40 -1.49%) sports an impressive 3.9% yield, but the stock has not participated in this summer’s rally and is actually down 5% since the end of June. However, here are 4 hot agriculture dividend stocks you should consider:
Scotts Miracle-Gro
Last week, Scotts Miracle-Gro (SMG: 51.12 -0.68%) announced that they were doubling their dividend. With the increase, the yield on SMG shares jumps to 2.0%. The stock has climbed 12% since the beginning of July and has strong cash flows and a healthy balance sheet.
Deere & Co.
While Deere & Co. (DE: 87.93 -0.64%) is trading close to their 52-week high, many analysts believe that the stock still has plenty of room to run. The company is expected to report 25% earnings growth this quarter and yet still offers investors a 1.8% dividend yield.
Monsanto
Earlier this summer it looked like Monsanto’s (MON: 78.33 -1.02%) stock price may never stop falling. However, since hitting a 52-week low in early July the stock seems to have gone up almost every day. Monsanto just boosted their dividend yield to 1.9% and the stock is still trading well below their 52-week high.
Bunge
Bunge (BG: 62.99 +5.44%) is another fertilizer stock with a strong presence in emerging markets. While their 1.7% yield isn’t overly exciting, the stock appears cheap at only 10x 2011 earnings.
Dividend investors may also want to consider Joy Global (JOYG: 0.00 N/A) and Archer Daniels Midland (ADM: 30.75 +1.08%) as additional dividend plays in the ag sector.
