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3 Agriculture Stocks to Bet the Farm On we've put together the following list of 3 agriculture stocks to bet the farm on. Let's take a deeper look at these intriguing companies that are help...

By Sean Sechler

entrepreneur daily

This story originally appeared on MarketBeat

Depositphotos.com contributor/Depositphotos.com - MarketBeat

Companies operating in the agriculture industry have a lot to offer in terms of investment opportunities, and there are several arguments that support including them in any portfolio. These are businesses that harvest and provide important agricultural commodities including fertilizers, grains, livestock, soybeans, and more. With food prices soaring all over the world and the U.S. Department of Agriculture reporting that net farm income is expected to increase 15.3% to $113 billion in 2021, it's clear that these stocks could deliver strong gains in the coming quarters.

It's also worth considering the fact that agriculture stocks can potentially help investors combat the impacts of inflation, which is certainly an attractive quality in today's uncertain economic environment. A few stocks in the sector have recently been showing relative strength and could be great long-term buys for investors to consider. That's why we've put together the following list of 3 agriculture stocks to bet the farm on. Let's take a deeper look at these intriguing companies that are helping to keep the world from going hungry.

CF Industries Holdings Inc (NYSE:CF)

This company is a major manufacturer and distributor of nitrogen fertilizer products in North America, which is essential for proper crop nutrition and maximum yields. With crop prices like corn heading to the highest levels in years and strong global demand for nitrogen fertilizers, CF Industries is nicely positioned to take advantage of what could be record amounts of acres planted in 2021. What's also nice about this stock is that it offers investors a 2.24% dividend yield, and CF generates ample cash flows to support the payouts over time.

CF Industries had a strong Q2, including Adjusted EBITDA up 22% year-over-year, and with nitrogen prices expected to remain high for the foreseeable future investors can expect a big fiscal year from the company. Finally, the fact that CF wants to position itself at the forefront of clean hydrogen supply makes it an easy company to support. CF Industries announced a green ammonia project back in 2020 and is certainly attractive for those investors that want to invest in businesses with clean energy initiatives. The stock has rallied over 12% this week and could be heading for new 52-week highs in the coming sessions, so keep an eye on this one in the coming sessions.

Mosaic Co (NYSE: MOS)

Next up is Mosaic, another major producer of crop nutrients that serves customers in approximately 40 different countries. Mosaic specializes in producing concentrated phosphate and potash, which are both incredibly important nutrients in the agriculture industry. It's worth adding shares of this stock for many of the same reasons mentioned above for CF Industries, as Mosaic should benefit from strong crop prices in the near term along with heightened global demand for fertilizers. There's also a lot to like about Mosaic's Fertilizantes business segment, which includes phosphate assets in Brazil and an international distribution segment that allows the company to move its products worldwide.

Countries like India and China find themselves in a position where they need to improve their food production to deal with their rising populations, which could be a nice growth driver for potash producers like Mosaic over the long term. In Q2, Mosaic reported Q2 revenues of $2.8 billion, up 37% year-over-year, along with a gross margins increase of 193%. The company also recently authorized a $1 billion share repurchase program, which is another strong reason to consider this leading fertilizer company.

Tyson Foods Inc (NYSE: TSN)

Animal protein is a key staple in the diet of millions, which is a big reason why Tyson Foods should be on your radar. It's a fully integrated producer of chicken, beef, and pork and also produces a variety of prepared foods. It's a company that should benefit from a rebound in the foodservice industry in the coming months, which makes it an intriguing reopening play as well. It's worth noting that China has been dealing with a swine fever outbreak that could boost the demand for protein, which is another plus for companies like Tyson. There's also a lot to like about the company's investments in creating plant-based and lab-growth protein, which should be very important over the next decade as the world turns to alternative food sources.

Tyson Foods offers investors a 2.34% dividend yield, so investors can count on consistent income from this agricultural giant. The company reported Q3 adjusted EPS of $2.70, which was more than double than the prior-year figures, and also saw its sales increase 24.5% to $12.5 billion. The bottom line is that Tyson Foods is a quality agriculture name trading at a reasonable valuation, so consider adding shares if you are interested in exposure to the sector that helps to keep the world eating well.

Tyson Foods is a part of the Entrepreneur Index, which tracks some of the largest publicly traded companies founded and run by entrepreneurs.

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