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The 3 Best Agribusiness Stocks to Buy for June 2023

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  • People will always need food, making agribusiness companies a safe haven if economic conditions deteriorate.
  • Darling Ingredients (DAR) turns waste products from farms into everything from drugs to biofuels, making them a key sustainability stock.
  • Trimble (TRMB) brings precision technology and the Internet of Things to farms everywhere.
  • The Andersons (ANDE) is a pure farming play, as they are most heavily invested in grain and fertilizer and the distribution thereof.
Best Agribusiness Stocks - The 3 Best Agribusiness Stocks to Buy for June 2023

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Today’s agribusiness isn’t just about farms and farmers. It involves blending technology and agriculture in innovative ways. For example, contemporary farms heavily depend on automated systems powered by the internet of things. They also utilize agricultural by-products as industrial feedstock instead of wasting them. So, modern farms are technological wonders, and leading agribusiness stocks meet all their tech needs.

Next, watch out for high-potential agribusiness stocks. They keep pushing technological boundaries. They may involve creating new chemical pathways for waste or developing software to enhance farm efficiency. In essence, agribusiness has become a tech-dependent industry. Recognizing this shift will distinguish a smart investor from a mere speculator. So, ditch the 20th-century mindset because 21st-century farms offer more than just crops and tractors!

Lastly, like any economic sector, agribusiness has winners and losers. Companies that adapt to technology are thriving, while others are rapidly declining. Additionally, government regulations demanding net-zero carbon emissions are shaking things up. These rules require agribusiness to slash emissions or face tax and legislative penalties. But some agribusiness stocks have already prepared well for this shift. These stocks are some of the top agribusiness buys today.

Darling Ingredients (DAR)

red tractor in yellow field with clouds behind it
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Darling Ingredients (NYSE:DAR) is an innovative agribusiness that turns waste into wonders. While they do not own farms themselves, their business focuses on collecting and processing farming and food waste into usable ingredients. In the agribusiness this is known as “rendering,” and Darling Ingredients uses it to turn things like spare meat into everything from pharmaceuticals to pet kibble to biofuels.

This innovative focus gives Darling Ingredients a world of possibilities for growth far outside traditional agriculture. For instance, it has recently partnered with the Terasaki Institute for Biomedical Innovation. In this partnership, Darling Ingredients will provide modified gelatins for use in regenerative therapy. As our population continues to age, such regenerative therapies will increase in demand. Darling Ingredients is thus positioning itself as a primary producer for the medicines of the future.

Darling Ingredients is also big in the sustainability industry, an industry that continues to grow alongside the world’s population and industrial output. They are partnering with companies such as Chick-Fil-A (privately held) to turn used cooking oil into biodiesel. This fuel reduces greenhouse emissions by up to 85% compared with regular diesel. As nations pass laws and regulations to cut greenhouse emissions, biodiesel will be the easiest switch to make because it can use the same infrastructure as oil and gasoline but burns much cleaner.

Darling Ingredients’ most recent earnings report showed revenue growing at a rapid clip.  Net sales went from $1.4 billion to $1.8 billion year on year and operating income went from $233 million to $256 million.  With their focus on re-use and sustainable growth, that growth is likely to continue into the future.  And that makes Darling Ingredients one of the best agribusiness stocks for investment.

Trimble (TRMB)

a picture of farmland during the daytime
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Farming in the 21st century is as much about technology as it is biology. The modern farmer has a suite of tools to measure every possible input and input to ensure maximum efficiency and yields. And that’s exactly where Trimble (NASDAQ:TRMB) comes in.

Trimble is a mainstay of modern precision farming, helping farmers grow more using less. For example, Trimble offers a virtual farm service. This is an online interactive experience that lets farmers troubleshoot their problems and find solutions. This service also lets farmers test and plan their activities, so they can grow the most crop using the least amount of inputs.

Water, fertilizer, and other inputs are also at the very foundations of modern farming, but are growing ever shorter in supply. Trimble’s precision farming tools are key to keeping food costs low even as input costs rise. This also makes Trimble a good investment for the future of farming, as water becomes ever more scarce with ever more people living on our planet.

Finally, Trimble offers a number of Internet of Things tools to help farmers keep track and stay efficient. Trimble’s tools allow farmers to remotely monitor and control their equipment in real time, ensuring efficiency and reducing wastage. The modern farm is a technological marvel, and Trimble is supplying much of that technology.

In its Q1 2023 earnings, Trimble reported $915 million in total revenue, down 8% from Q1 2022.  However net income rose from $110 million to $128 million over the same period as savings were realized elsewhere.  Trimble is also growing, having acquired Transporeon, a logistics and transport tech company.  This deal also increases Trimble’s global reach, and further reinforces Trimble as one of the best high potential agribusiness stocks for investors.

The Andersons (ANDE)

An image of tomato plants
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While the previous two stocks are pushing the envelope on what agribusiness can be, The Andersons (NASDAQ:ANDE) is going back to basics. The Andersons is a buyer and seller of food and farm products, so for an investor looking for a safe, pure play, they are a top agribusiness stock to buy. They recently sold off their railcar business to Cathcart Rail.  But this has let them focus their efforts on their core business of grain and fertilizer distribution.

That refocus on grain and fertilizer could already be paying off, they’ve announced plans to expand distribution terminals in Ohio for instance. They’ve also continued to innovate in their fertilizer business. They have patented specialty fertilizers such as Phosfix that contain the precise elements in the precise amounts needed for plant growth. As farming becomes ever more scientific, such specialty products will continue to serve The Andersons well.

The Andersons latest earnings report showed them as being more “stable” than “growing.” Sales and merchandising revenue was down slightly year on year from $4 billion to $3.9 billion.  While gross profit was up slightly year on year from $120 million to $148 million. They reported a small net loss due to a non-cash asset impairment from the renewables business.

With a focus on grain and fertilizer, The Andersons will likely be a safe play if economic conditions turn south. And that makes them one of the best agribusiness stocks for investment.

On the date of publication, John Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2023/06/the-3-best-agribusiness-stocks-to-buy-for-june-2023/.

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