Perhaps more than any other industry, agriculture is here to stay. Agriculture started around 14,000 years ago and it is a safe bet we will be practicing agriculture far into the future, suggests Bob Ciura, editor at Sure Dividend.
The growth of the global population is tied to increasing agricultural efficiency. As the global population grows, so does the need for improved agricultural production. This creates a long-term demand driver for agriculture stocks.
Ingredion (INGR) is a multinational ingredient solutions company. It operates in over 44 countries, and employs more than 11,000 people. The company is principally engaged in producing and selling starches and sweeteners for various industries.
Essentially, Ingredion turns grains, fruits, vegetables, and other plant-based materials into value-added ingredient solutions for the food, beverage, animal nutrition, brewing, and industrial markets.
INGR released second-quarter 2022 results on August 9th, 2022. Ingredion saw growth in all regions as net sales increased 16% to $1.76 billion.The company has begun to offset inflation by increasing prices in North America and South America, where net sales grew 20% and 42%, respectively.
We expect annual returns of 9.9% per year, due to 3% expected EPS growth, the 3.4% dividend yield, and a 3.5% annual return from an expanding P/E multiple.
FMC Corporation (FMC) is an agricultural sciences company that provides crop protection, plant health, and professional pest and turf management products. Through acquisitions, FMC is now one of the five largest patented crop chemical companies.
FMC Corp. has a positive outlook for 2022 and raised its outlook during the last earnings report. Revenues are now expected to be in the range of $5.5 to $5.7 billion, reflecting 11% growth at the midpoint versus 2021, and adjusted earnings per diluted share are expected to grow by 6% (in the range of $7.00 to $7.70).
The company achieved higher pricing in all regions in the second quarter, with the highest benefit coming from North America and Latin America. The strong volume growth was in part due to supply uncertainty in the industry, which resulted in customers placing orders in advance to secure material.
Furthermore, the company expects to repurchase $500 million to $600 million of shares in 2022. We expect annual returns of 10.9% per year, driven by 7% expected EPS growth and the 1.8% dividend yield, as well as a ~2.1% annual boost from an expanding P/E multiple.
