In a World of Scarce Resources, Consider these Stocks: Monsanto Company (MON) and More

Page 1 of 2

The human population was estimated to be nearly 7 billion in 2011 by The World Bank.  Last year, the U.S. Census Bureau estimated the number to be slightly higher than that.  The world’s population keeps growing, and emerging economies continue to develop.  As a result, commodity prices have risen in recent years and are likely to keep rising over time.  With that in mind, the following companies have business models poised to profit from the reality of scarce resources.

Monsanto Company (NYSE:MON) is the $55 billion agricultural giant that provides products for farmers worldwide.  It operates in two segments, Seeds and Genomics, and Agricultural Productivity.  Last October, the company reported its full-year financial results, which were very good.

genetically modified foods

Total revenues rose more than 14% year over year, and earnings per share climbed more than 28% versus the prior year.  Since 2008, Monsanto achieved four-year compound annual growth in sales of 4.4%.

Furthermore, the company got off to a great start in fiscal 2013, reporting first-quarter sales growth of more than 20%.  Monsanto’s stock has been on fire recently, rising more than 30% in 2012 and has increased more than 6% to begin 2013.

Archer Daniels Midland Company (NYSE:ADM) carries a $20 billion market capitalization and manufactures and sells protein meal, vegetable oil, corn sweeteners, flour, biodiesel, and ethanol.  In early February, the company reported 2012 second-quarter earnings per share of $0.60, up 18% from the previous year.  In addition, the company provided investors with a 9% dividend increase.

Archer Daniels Midland has an impressive dividend track record, having paid dividends for 325 consecutive quarters.  The company has raised its dividend every year since 2002.  At current prices, the stock looks to be attractive for both value and dividend investors, with a trailing price-to-earnings ratio of less than 15 and a 2.5% yield.

Deere & Company (NYSE:DE) manufactures and distributes agriculture and turf equipment, and construction and forestry equipment, worldwide, commanding a $36 billion market value.

Deere is certainly not an expensive stock, with trailing and forward P/Es of 12 and 10, respectively.  In addition, the stock trades for a price-to-earnings growth ratio of 1.13, indicating that the company is priced conservatively in relation to its future growth expectations.

In December, Deere provided investors its annual results, reporting sales and earnings per share growth of 13% and 15%, respectively.  In addition, in 2012 Deere raised its dividend by more than 12% and should raise its dividend in time for its next payout.

American States Water Co (NYSE:AWR) provides the most scarce resource of all:  water.  The company purchases and distributes water in California.

The company is the gold standard for dividend-raisers.  American States Water Company has increased its dividend every year since 1955, a streak amounting to 58 consecutive years.  Its last dividend raise was an impressive 27% in 2012.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

The 10 Longest Wars of All Time

The 13 Worst Looking Foods that Taste Great

The 6 Most Gruesome Injuries Suffered During a Sports Match

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!