5 Best Agriculture Stocks To Invest In

2. Deere & Company (NYSE:DE)

Number of Hedge Fund Holders (Q1): 66

Deere & Company (NYSE:DE) manufactures and sells agricultural machinery, heavy equipment, forestry machinery, diesel engines, drivetrains, and lawn care equipment. For the agriculture sector, the company produces tractors, combine harvesters, cotton harvesters, balers, planters, silage machines, and sprayers. On August 2, Deere & Company (NYSE:DE) announced that it made a minority investment in an African agriculture tech firm, Hello Tractor.

As of August 9, Deere & Company (NYSE:DE) has a dividend yield of 1.32% and a $4.52 annual payout. The latest quarterly dividend of $1.13 was paid on August 8. The company has a payout ratio of 17.71% and has increased its dividend for 2 consecutive years. Over the past 10 years, the company has raised its dividend by 146% and bought back approximately 23% of all its outstanding shares.

On August 10, Deere & Company (NYSE:DE) was priced at $352.36, trading significantly below the 52-week high of $446.76. Moreover, the trailing twelve-month return on equity for the company is 6.17% while the return of equity is recorded at 34.91%. 

On July 15, Jefferies analyst Stephen Volkmann maintained a Buy rating on Deere & Company (NYSE:DE) shares and lowered the price target to $400 from $450. Volkmann expects machinery companies to meet or beat the earning estimates for Q2 and believes that some companies might even raise their guidance. Deere & Company (NYSE:DE) is expected to announce its quarterly results on August 19.

Here is what ClearBridge Investments had to say about Deere & Company (NYSE:DE) in its Q2 2022 investor letter:

“In our engagements with farm equipment maker Deere (NYSE:DE), we have followed new technology as it has developed from early promise of environmental and social benefits to market reality. In March 2022, Deere’s Chairman & CEO and CFO met with ClearBridge’s investment team in our New York offices. While prior to the pandemic we had regularly hosted the company, this meeting was among the most interesting as the relatively new CEO outlined a bold plan that placed improved environmental stewardship squarely at the center of the company’s future.

Industrial farming, at its core, is not an especially environmentally friendly enterprise. Agronomic practices have improved over time, but fertilizer, herbicide and pesticide applications and water usage remain problematic. Deere believes its precision farming technology can drive down chemical and fertilizer volumes materially —possibly by as much as 70% — as sensors and cameras attached to tractors, sprayers and combines help determine the exact level of chemicals that might be required…” (Click here to see the full text)