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Monsanto Company (MON), Syngenta AG (ADR) (SYT): Harvard Sees Opportunity in Food Demand

The company’s seed business represented about 30% of sales in 2012. Sales in the division grew 14% last year on higher volume and pricing. Moreover, the company just settled a legal battle with Monsanto that should clear the way for continued growth.

Although the chemicals business is cyclical in nature, management has been moving toward less cyclical industries. The increasing importance of seeds makes E I Du Pont De Nemours And Co (NYSE:DD) a good option for investors looking to find a diversified play in the space. A 3.5% or so dividend yield is further enticement, as chemical companies are currently in the doldrums.


Syngenta AG (ADR) (NYSE:SYT) is a leading maker of herbicides that has begun to move into the seed space. Its 2012 sales broke down roughly 70% herbicides and 30% seeds. This puts the company in a pretty good position, since it has an established position in crop protection and a growing presence in the seed market.

The push into seeds, however, is all about self preservation. Indeed, as more and more seeds are engineered to reduce the need for pesticides, Syngenta AG (ADR) (NYSE:SYT)’s herbicides businesses will suffer. So it is important that the company continues to grow on the seed side.

The company has been putting up generally solid numbers on the top and bottom lines for some time. Its dividend has been a bit variable, but it currently yields north of 2%. Investors should monitor the seed business for continued growth.

Farm profits

Investors looking to join Harvard in the agriculture market should take a look at the three stocks noted above. Of them, DuPont is probably the most interesting candidate for income investors and more conservative types.

The article Harvard Sees Opportunity in Food Demand originally appeared on and is written by Reuben Brewer.

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