5 Best Farmland Stocks to Buy Now

1. Deere & Company (NYSE:DE)

Number of Hedge Fund Holders: 54

Deere & Company (NYSE:DE) is a Moline, Illinois-based manufacturer of agricultural and forestry equipment and machinery, with a portfolio of products to serve the construction sector as well.

Although the firm posted mixed Q3 FY22 results on August 19, analysts remain bullish on the long-term outlook of Deere & Company (NYSE:DE). Deere & Company (NYSE:DE) observed YoY revenue growth of 22.3% to $14.1 billion during the second quarter. The company narrowed its FY22 net earnings guidance to a range of between $7 billion and $7.2 billion compared to its prior forecast range of $7 billion to $7.4 billion. The revised forecast still falls in line with the consensus forecast of $7.13 billion.

Despite the supply-chain challenges, Deere & Company (NYSE:DE) is well-positioned in the industry due to backlogs and rising market share. The firm’s management believes that the company’s agricultural fundamentals are very strong and anticipates a high single to low double-digit increase in its product prices in the future.

In its Q1 2022 investor letter, ClearBridge Investments presented its outlook on Deere & Company (NYSE:DE). Here’s what the firm said:

“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)

For more industry-specific stocks that are worth considering, check out the 12 Best Cybersecurity Stocks to Buy Now and the 11 Best Artificial Intelligence Stocks To Buy Now.

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