For instance, GPS and GIS mapping assist in conducting analysis of the field and proper planning of resources. IoT sensors enable the collection of information on weather and soil status and help in making the right decisions that increase production and reduce the negative impact on the environment.
An increase in the number of startups and scale-ups in the area of precision agriculture is also improving the sector’s vitality. These companies are coming up with new technologies ranging from drone-based weed management to AI solutions for crop monitoring and soil sensors.
Due to these rapid developments in technology, I’m bullish on precision agriculture stocks and will be for the foreseeable future. So, here are three companies worth adding to your portfolio.
Deere & Company (DE)
Deere & Company (NYSE:DE), being one of the leading players in the agricultural equipment industry, has a well-recognized brand and technological edge I think would enable it to leverage the increasing need for precision farming.
The company’s strategy of producing new precision agriculture solutions is also a major strength in my view; this includes GPS-equipped tractors, smart planting techniques and data analysis farming tools. These products are targeting the current trends of the industry focusing on enhancing efficiency and environmental conservation, and I think they will be the major contributors to the future growth of Deere.
Despite the fact that the company has been struggling in the last year with its stock price dropping by 9% over the past year, I do not think it is a long-term setback. In my opinion, Deere’s good balance sheet and the consistent dividend payout are two things that make it a good investment.
The Mosaic Company (MOS)
The Mosaic Company (NYSE:MOS) is one of the world’s largest producers and marketers of concentrated phosphate and potash crop nutrients used in precision farming. Because of this, Mosaic is ideally placed as the world’s second-largest integrated phosphate producer to take advantage of increasing global needs for higher yield and more environmentally friendly farming techniques.
The Esterhazy hydrofloat project and the company’s capacity to increase MicroEssentials by 800,000 tonnes are examples of how Mosaic is working to improve precision agriculture. These investments together with the company’s strong brand and diversified operations in North America, Canada and Brazil make Mosaic a company well positioned in an industry with a bright future.
Analysts are also bullish on MOS, as the experts believe it will rise by over 20% in the next 12 months. That is also supported by a reasonable valuation. It trades at just 13x trailing P/E and has a reasonable market cap of $9.8 billion. This then makes it one of those precision agriculture stocks to consider.
Bunge (BG)
Bunge (NYSE:BG) is one of the largest agribusiness and food companies that can take full advantage of the opportunities provided by the development of precision agriculture. The company, one of the ABCD agro-giant companies, is present in Brazil, the largest soy producer in the world.
Bunge’s business of oilseed processing and specialty plant-based oils, fats and proteins is a good fit for precision agriculture that enhances efficiency in farming. The company has a good brand name, operates in many different sectors and is connected to the major agricultural markets.
Still, Bunge is not a direct supplier of precision agriculture technologies. It helps farmers by providing information, recommendations and services connected with fertilizers and other crops’ inputs. This advisory position allows Bunge to persuade the farmers to adopt the precision farming techniques it advocates for.
Analysts expect a generally bullish mix for BG stock in terms of EPS and revenue increases for the foreseeable future, which includes periods of double-digit EPS and revenue growth.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.