5 Best Farmland and Agriculture Stocks To Buy Heading Into 2023

In this article, we discuss 5 best farmland and agriculture stocks to buy heading into 2023. If you want to see more stocks in this selection, check out 11 Best Farmland and Agriculture Stocks To Buy Heading Into 2023. 

5. Tractor Supply Company (NASDAQ:TSCO)

Number of Hedge Fund Holders: 37

Tractor Supply Company (NASDAQ:TSCO) is a Tennessee-based company that offers a selection of merchandise, including equine, livestock, and pet animal products, heating products, lawn and garden items, power equipment, and maintenance products for agricultural and rural use. It is one of the premier agriculture stocks to buy heading into 2023. Tractor Supply Company (NASDAQ:TSCO) paid a quarterly dividend per share of $0.92 to shareholders on December 6. 

On December 19, Credit Suisse analyst Karen Short initiated coverage of Tractor Supply Company (NASDAQ:TSCO) with an Outperform rating and a $260 price target. Tractor Supply Company (NASDAQ:TSCO) is a “best-in-class retailer gaining significant share in a needs-based, highly fragmented sector within retail,” the analyst told investors in a research note. Consumables, usables, and edibles are “arguably very defensive,” and these categories account for more than 50% of the company’s sales, noted the analyst.

According to Insider Monkey’s data, 37 hedge funds were bullish on Tractor Supply Company (NASDAQ:TSCO) at the end of September 2022, compared to 41 funds in the prior quarter. Select Equity Group held the largest stakeholder of the company, with 2.2 million shares worth $413 million.  

Here is what Wedgewood Partners has to say about Tractor Supply Company (NASDAQ:TSCO) in its Q4 2021 investor letter:

“Tractor Supply contributed favorably to performance during the quarter. Demand from the Company’s niche, affluent rural customer base continues to surge in a post-COVID world with comparable store sales running over +40% higher compared to pre-pandemic (2019) levels. Tractor Supply is seeing growth across all channels, from its website to e-commerce that is fulfilled by its 2000-store fleet to regular in-store traffic. The Company is also managing inflation and supply chain disruptions extremely well, passing through nearly +7% of inflation on consumable goods and managing a quarterly inventory in-stock rate that was actually higher than pre-pandemic. Tractor Supply is an exceptional retailer, and we continue to hold it as a top position.”

4. The Mosaic Company (NYSE:MOS)

Number of Hedge Fund Holders: 46

The Mosaic Company (NYSE:MOS) is a Florida-based company that produces and markets concentrated phosphate and potash crop nutrients in North America and internationally. The company operates through three segments – Phosphates, Potash, and Mosaic Fertilizantes. It is one of the best agriculture stocks to monitor. On December 16, The Mosaic Company (NYSE:MOS) declared a $0.20 per share quarterly dividend, a 33.3% increase from its prior dividend of $0.15. The dividend is payable on March 16, 2023 to shareholders of record on March 2. 

On November 22, Piper Sandler analyst Charles Neivert maintained an Overweight rating on The Mosaic Company (NYSE:MOS) but lowered the price target on the shares to $65 from $75 following the Q3 results. 

According to Insider Monkey’s Q3 data, 46 hedge funds were bullish on The Mosaic Company (NYSE:MOS), compared to 50 funds in the prior quarter. Eric W. Mandelblatt’s Soroban Capital Partners is the biggest stakeholder of the company, with 6.8 million shares worth $332 million. 

Ariel Investment made the following comment about The Mosaic Company (NYSE:MOS) in its Q3 2022 investor letter:

“Producer and marketer of crop nutrients The Mosaic Company (NYSE:MOS) also traded up in the period on solid financial results. MOS continues to demonstrate its ability to raise prices and offset input cost inflation, as well as return significant capital to shareholders through buybacks. Meanwhile, trade flows have shifted with Russia and Belarus, the second and third largest fertilizer exporters globally, banning exports and facing sanctions imposed by the West. As a result, MOS is expanding production to help meet global demand. Given management’s optimistic outlook and disciplined approach towards capital allocation, we continue to believe the company is well positioned from a risk/reward standpoint.”

3. Bunge Limited (NYSE:BG)

Number of Hedge Fund Holders: 48

Bunge Limited (NYSE:BG) is one of the premier agriculture stocks to invest in. It is a Missouri-based agribusiness and food company that operates through four segments – Agribusiness, Refined and Specialty Oils, Milling, and Sugar and Bioenergy. On November 15, Bunge Limited (NYSE:BG) declared a quarterly dividend of $0.625 per share, in line with previous. The dividend is payable on March 2, 2023 to shareholders of record on February 16. 

On November 22, Bunge Limited (NYSE:BG) announced that it has signed a strategic partnership with France’s BZ Group, and it has acquired 49% of the business. The BZ Group sources products from a huge network of independent farmers, including grains, oilseeds and pulses from suppliers in the northwest of France to export to its customers. This partnership will strengthen operational and commercial cooperation in a largely volatile and demanding market backdrop.

UBS analyst Manav Gupta on December 14 initiated coverage of Bunge Limited (NYSE:BG) with a Buy rating and a $133 price target. The market is primarily focused on shrinking margins in 2024 and 2025 while “ignoring” the $13.50-plus per share in earnings Bunge Limited (NYSE:BG) should report in 2022, the analyst told investors. In addition, Bunge Limited (NYSE:BG) is not getting credit for $3.3 billion in capital it plans to deploy in the next three years, according to the analyst, who estimates that this should add $2.50 per share to EPS.

According to Insider Monkey’s data, 48 hedge funds were long Bunge Limited (NYSE:BG) at the end of September 2022, and Jack Woodruff’s Candlestick Capital Management held the biggest position in the company, comprising 1.15 million shares worth $95 million. 

Here is what Old West Investment Management had to say about Bunge Limited (NYSE:BG) in its Q1 2022 investor letter:

“Bunge (pronounced BUN-GEE) Ltd (NYSE:BG) is one of the biggest agribusinesses and food companies in the world. There are four worldwide companies that dominate the sector, the others being Archer-Daniels-Midland Cargill, and Dreyfuss. One of our favorite ways to screen for new ideas is following insider buying. When I saw the Form 4 filed by new Bunge CEO Greg Heckman, his purchase of $9 million of BG stock intrigued me. My initial thought was the company gave him the stock as a signing bonus. I contacted BG Investor Relations and asked whether it was a signing bonus or did Heckman actually write a check for $9 million. IR assured me it was his own hard-earned money that he invested in the company he was about to run.

Heckman was a long time executive at Conagra Foods who obviously sensed opportunity at BG. One of his first moves as CEO was to move the company’s HQ from New York to St. Louis, right in the middle of America’s breadbasket. BG had been plagued for years with poor decisions by underperforming management. Heckman’s decision to move to St. Louis was indicative of a no-nonsense style and he would commence cutting expenses and selling non-core assets…” (Click here to see the full text)

2. Corteva, Inc. (NYSE:CTVA)

Number of Hedge Fund Holders: 50

Corteva, Inc. (NYSE:CTVA) is an Indiana-based agriculture company that develops technologies like advanced germplasm and related traits that deliver optimum yield for farms. The company also provides products that protect fields against weeds, insects, pests, and diseases. On November 30, Corteva, Inc. (NYSE:CTVA) announced the acquisition of the biologicals firm Stoller Group for $1.2 billion in cash. The deal will be completed in the first half of 2023 and Stoller’s results will be accretive to Corteva, Inc. (NYSE:CTVA)’s operating EBITDA and operating EPS next year.

On November 17, Barclays analyst Benjamin Theurer raised the price target on Corteva, Inc. (NYSE:CTVA) to $75 from $71 and kept an Overweight rating on the shares following the Q3 earnings season. 

According to Insider Monkey’s data, 50 hedge funds were long Corteva, Inc. (NYSE:CTVA) at the end of the third quarter of 2022, compared to 42 funds in the last quarter. Israel Englander’s Millennium Management is the largest stakeholder of the company, with 2.60 million shares worth $148.70 million. 

Here is what Aristotle Capital Management Value Equity has to say about Corteva, Inc. (NYSE:CTVA) in its Q1 2022 investor letter:

“Corteva Agriscience, one of the world’s largest seed and crop protection companies, was a primary contributor for the quarter. Due to its respected brand and the value-added benefits of its patented seeds and crop protection solutions for farmers, Corteva has been able to more than offset input cost inflation with sustainable price increases. In addition, the company’s ongoing mix shift to higher-margin, premium products, a catalyst we previously identified, is aiding both sales and profit growth. Shares were likely also buoyed by the rise in crop prices. Market participants, perhaps eager to chase short-term trends, poured into the sector. At Aristotle Capital, we look past such gyrations and, as long-term investors, do not attempt to predict short-term changes in commodity prices. We remain excited about what we view to be high-quality characteristics and fundamental improvements that permeate Corteva’s business, not the least of which include its pricing power.”

1. Deere & Company (NYSE:DE)

Number of Hedge Fund Holders: 57

Deere & Company (NYSE:DE) is an Illinois-based company that manufactures and distributes equipment worldwide. The company operates through four segments – Production and Precision Agriculture, Small Agriculture and Turf, Construction and Forestry, and Financial Services. On November 23, Deere & Company (NYSE:DE) posted a FQ4 GAAP EPS of $7.44 and a revenue of $14.35 billion, outperforming Wall Street estimates by $0.34 and $890 million, respectively. The company expects net income for FY2023 to be in the range of $8 billion to $8.5 billion. It is one of the agriculture stocks to invest in. 

On December 19, Stifel analyst Stanley Elliott raised the price target on Deere & Company (NYSE:DE) to $477 from $475 and maintained a Buy rating on the shares. In his 2023 outlook note for his Machinery, Construction Materials, and Building Products coverage, the analyst stated that he expects “typical late-cycle trends” including weakness in housing but non-residential demand increasing. The analyst also forecasts the price/cost environment to improve.

According to Insider Monkey’s data, 57 hedge funds were long Deere & Company (NYSE:DE) at the end of the third quarter of 2022, compared to 54 funds in the last quarter. Bill & Melinda Gates Foundation Trust is the biggest stakeholder of the company, with approximately 4 million shares worth $1.30 billion. 

Harding Loevner made the following comment about Deere & Company (NYSE:DE) in its Q3 2022 investor letter:

“Deere & Company (NYSE:DE), the world’s largest manufacturer of agricultural equipment, reported fiscal third-quarter growth in revenues and earnings of 22% and 16%, respectively. These results reaffirmed Deere’s pricing power, which enabled the company to overcome rising raw material costs and a host of supply chain challenges.

John Deere also suffered supply chain challenges. It could not complete some machines as it waited for parts, and higher shipping costs cut into its margins. In the third quarter, production recovered. Revenue for its connected services Precision Ag unit increased 43% year over year, thanks to rising unit sales and a 15% price bump. Deere is the world’s largest agricultural machinery manufacturer, with the largest customer base, the largest dealer network, and arguably the industry’s most advanced technology stack. Deere has also amassed the industry’s biggest agricultural database. These powerful competitive advantages should help Deere to raise its margins as it targets a 40% share of revenues by the end of the decade from less cyclical, recurring sources such as software and maintenance services.”

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily enewsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also check out 15 Biggest Dry Bulk Shipping Companies in 2022 and 20 Largest Hotel Chains in the World.