We recently compiled a list of the 7 Best Agriculture Stocks to Buy Right Now. In this article, we are going to take a look at where Dole plc (NYSE:DOLE) stands against the other agriculture stocks.
Global Agriculture: Trends, Challenges, and Opportunities Ahead
The global agriculture market is currently experiencing significant changes driven by various factors, including population growth, climate change, and technological advancements.
According to a report by The Business Research Company, the global agriculture market was valued at $13.27 trillion in 2023. The market is expected to expand at a compound annual growth rate (CAGR) of 7.7% during 2024-2028 to reach a value of $19.28 trillion by the end of the forecast period. The agriculture market is primarily driven by the increasing demand for food due to a rapidly growing population, which is projected to reach 9.7 billion people by 2050 according to estimates by the United Nations.
Additionally, advancements in technology, such as precision agriculture and automation, are transforming farming practices, allowing for more efficient use of resources and higher crop yields.
The OECD-FAO Agricultural Outlook 2024-2033 highlights significant trends in the global agriculture market. Over the past 20 years, the demand for agricultural products has grown, primarily due to population and income increases in low- and middle-income countries. These nations have also boosted their production by adopting new technologies and better utilizing their natural resources.
Looking ahead, total consumption of agricultural and fisheries products is expected to rise by 1.0% annually over the next decade, mainly in low- and middle-income regions. Global food consumption is projected to increase by 1.2% each year, driven by population growth and rising incomes. Notably, the use of crops for animal feed is anticipated to grow faster than direct food consumption. This shift reflects a trend towards more animal-based diets, leading to increased livestock production.
In middle-income countries, daily calorie intake per person is expected to rise by 7% by 2033, fueled by higher consumption of staple foods, livestock products, and fats. On the other hand, low-income countries will see a modest 4% increase in calorie intake. This slower growth indicates challenges in achieving the Sustainable Development Goal of eliminating hunger by 2030.
High-income countries are also changing their dietary habits, with a slight decrease in fat and sugar intake as people become more health-conscious. Overall, these trends suggest that while there is growth in food consumption globally, disparities remain between different income levels.
Our Methodology
To compile our list of the 7 best agriculture stocks to buy right now, we used the Finviz and Yahoo stock screeners to find the largest agriculture companies. We also reviewed our own rankings and consulted various reports to compile a list of the best agriculture stocks.
From an initial pool of over 20 agriculture stocks, we focused on the stocks that analysts believe possess the greatest potential for growth. Finally, we ranked the 7 best agriculture stocks to buy right now based on their average price target upside potential according to analysts as of November 14, 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A large group of farm workers harvesting fresh fruit in the morning sun.
Dole plc (NYSE:DOLE)
Average Upside Potential According to Analysts: 23.23%
Dole plc (NYSE:DOLE) is an Irish-American agricultural multinational company that is engaged in the growing, sourcing, packing, shipping, marketing, and distributing of fresh produce. It is one of the world’s largest producers of fruit and vegetables. DOLE is one of the best agriculture stocks to buy. The company operates in 30 countries and serves many more. Dole plc’s (NYSE:DOLE) supply chain is vertically integrated and spans the globe, with more than 250 facilities.
In its third quarter of 2024, the company reported a revenue of $2.1 billion, reflecting a 1% increase compared to the previous year. This growth was driven by strong operational performance across all segments, particularly in fresh fruit, which saw a 6.6% rise due to higher banana sales. However, net income dropped to $21.5 million, mainly because of a significant gain from selling a non-core asset last year.
Dole plc’s (NYSE:DOLE) strategic focus on capital allocation has allowed it to expand its operations effectively. The company announced plans to acquire two additional vessels for its fleet, enhancing its logistics capabilities and supporting future growth. Dole plc (NYSE:DOLE) is also committed to returning value to shareholders, declaring a dividend of $0.08 per share for the third quarter.
Over the past ten years, the company has demonstrated consistent growth, with revenue increasing at a compound annual growth rate (CAGR) of 11% and net income rising at 18%. The company has also grown its levered free cash flow at a CAGR of 18% during the same period.
Overall, DOLE ranks 7th on our list of the best agriculture stocks to buy right now. While we acknowledge the potential of DOLE as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DOLE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
