Agricultural Dividend Stocks

Posted by D4L | Wednesday, January 09, 2013 | | 0 comments »

Strong population and income growth in the developing world have buoyed the demand for commodities, especially for food. At the same time, unstable weather has resulted in shortages of certain agricultural commodities, such as grains, driving prices higher. The robust demand facing limited supplies is likely to result in a new commodities supercycle, in which prices will climb substantially in the coming years. Some, like famous hedge fund manager Jeremy Grantham, believe the new cycle is part of a general commodities paradigm shift, which Grantham called “the most important economic event since the Industrial Revolution.” All this has boosted the appeal of agricultural commodities as an investment class.

Dividend investors seeking exposure to agricultural commodities should consider different industry players across the value chain. These plays include farm and fertilizer stocks as well as commodities distributors and equipment manufacturers. Here is a list of five stock candidates with yields at or above 2% for an agricultural commodities-oriented portfolio: Potash Corp./Saskatchewan (NYSE:POT), Deere & Company (NYSE:DE), Terra Nitrogen Company, L.P. (NYSE:TNH), Rentech Nitrogen Partners LP (NYSE:RNF) and Archer Daniels Midland Company (NYSE:ADM).

Source: Insider Monkey

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