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wheat processing plant

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Improving Trade Environment Helps Global Agriculture Giant Reaffirm Position on Best Dividend Stocks List

Alejandro Barreto Oct 10, 2018


You know what’s exciting in the market these days? I bet you said bitcoin, the FANGs or even marijuana stocks. But you’d be wrong. The answer is corn, in addition to soybeans and the rest of the agriculture sector.

After being decimated during the recession, Ag has roared back in a big way as the global economy has started to fire on all cylinders. This has been huge for our deep-value Best Dividend Stocks List pick in the sector. Since the addition to our list, our Ag pick has performed beautifully with expanding margins, profits and a reaffirmed dividend payment.

But our firm’s future prospects will allow it be ’Knee high by the Fourth of July” and continue its pace of growth.

First, newly signed trade agreements with Mexico and Canada will do wonders for its bottom line. The sheer announcement that a deal has been reached sent prices for corn and other Ag commodities surging. At the same time, this gives hope that a key deal with China will be signed without too many issues or concessions.

Domestically, our pick is getting a boost as well. President Trump has announced new measures that will benefit both ethanol producers and the broader energy industry. In an effort to please both sides, the EPA will lift the summer ban on E15 gasoline and tighten restrictions on the trading of ethanol blending credits. This should make both farmers and the refiners happy. But more importantly, it should continue to push our pick’s cash flows and profits higher.

All in all, Ag could be in the most exciting sector in your portfolio, and our Best Dividend Stocks List pick is the best way to play it.

To summarize, here are five reasons why you should own this stock:

  1. Huge moat of irreplaceable assets featuring over 800 different facilities and processing plants as well as numerous rail cars and trucking fleets.
  2. Produced over $60 billion in revenues over the course of last year.
  3. Rising Ag prices have sent adjusted quarterly profits soaring over 40% year-over-year for the latest reported quarter.
  4. Increased its dividend for more than four decades straight and increased that payout over the last five years by an average of over 12% per year.
  5. Healthy payout ratio of 39.1% and yield of 2.62%.

Check out our original pick here.

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