Are These The Best Wheat Stocks To Invest In This Week?
As the stock market tumbles from news of growing Russian sanctions and import bans, wheat stocks are in focus. By and large, the current shift in attention to the wheat industry is not all that surprising. After all, Russia is one of, if not the largest exporter of wheat globally. By Reuters estimates, Russia and Ukraine together account for a whopping 29% of global wheat exports. With the war between the two nations, this chunk of the world’s wheat is essentially off the table. By extension, this turns into increasing pressure on existing wheat supplies and outgoing wheat prices. In detail, a combination of sanctions on Russia and a naval blockade of Ukrainian ports would be the cause for all this.
Overall, this would likely see wheat become another hot commodity, similar to oil, because of the current war. As such, agriculture-focused companies like The Andersons (NASDAQ: ANDE) and John Deere (NYSE: DE) could be worth noting. On one hand, Andersons reported record adjusted pretax income in its latest quarterly update just last month. The company cites strong execution across its 2021 grain belt harvest alongside growth in newer clean energy markets for the solid quarter. Moreover, Andersons also declared a quarterly cash dividend of $0.18 per share shortly after. This would mark its 102nd consecutive quarterly dividend since listing on the Nasdaq.
On the other hand, John Deere continues to expand its world-leading agricultural tech operations. Last week, the company acquired full ownership of three joint venture factories from previous team-ups with Hitachi. All in all, wheat and the broader agricultural space are among the more defensive plays in the stock market today. After considering the current market volatility, could wheat stocks be top picks now?
Wheat Stocks To Buy [Or Sell] Right Now
- MGP Ingredients Inc. (NASDAQ: MGPI)
- Archer-Daniels-Midland Company (NYSE: ADM)
- Bunge Ltd. (NYSE: BG)
MGP Ingredients Inc.
MGP Ingredients is a leading producer and supplier of premium distilled spirits and specialty wheat proteins and starches. Its distilled spirits include premium bourbon and rye whiskeys, gins, and vodkas. The company’s proteins and starches are created in the same manner and provide a host of functional, nutritional, and sensory benefits for a wide range of food products. MGPI stock is up by over 24% in the past year alone.
On February 24, 2022, the company reported its fourth-quarter and full-year 2021 financials. Diving in, sales for the quarter increased by 65.3% year-over-year to $166.8 million. The company says this quarter’s increase is due to sales growth in each of its reporting segments. Furthermore, gross profit increased by 66.3% to $52.8 million for the quarter. MGP Ingredients also posted a diluted earnings per share of $1.40, more than doubling from a year ago.
“Our record performance this year demonstrated the strength of our business model and the value each of our segments bring to our global customer base and was bolstered by the synergistic effects of the Luxco acquisition,” said David Colo, president, and CEO of MGP Ingredients. “New distillate and aged whiskey sales experienced another solid year which drove a 28.4% increase in premium beverage alcohol sales for the year. Specialty ingredients sales posted strong double-digit growth this year, resulting in a 16.1% increase in segment sales, and represents another record year for our Ingredient Solutions segment.” The company also continues to build its established track record of providing differentiated products and services to customers in 2022. All things considered, is MGPI stock worth investing in?
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Archer-Daniels-Midland (ADM) is a multinational food processing and commodities trading corporation. The company is a premier global human and animal nutrition company and delivers groundbreaking products to support healthier living. It provides an unmatched agricultural supply chain manager and processor. The company also provides food security by connecting local needs with global capabilities.
Last month, the company announced the pricing of its first sustainable bond, which will support initiatives for the company’s goals across the environmental, social, and governance (ESG) spectrum. In essence, the company agrees to issue $750 million in aggregate principal amount of 2.90% notes due 2032. The company intends to use the net proceeds from the offering to finance and/or refinance projects that meet certain criteria outlined in its Sustainable Financing Framework. This comes after ADM adopted the Framework in February 2022, and eligible projects will include green projects related to sustainable aquaculture and renewable energy among others.
On February 8, 2022, the company also released its alternative protein outlook for 2022. The outlook provides a deeper dive into one of the seven top consumer trends identified by the company for 2022. Based on the company’s findings, it reveals what is next for protein alternatives, which is expected to climb to a staggering $125 billion by 2030. This would include next-generation plant-based, whole-muscle solutions. With all that in mind, is ADM stock a top wheat stock to consider buying right now?
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Another name to consider in the space now would be Bunge. While not a direct producer of wheat, the company works very closely with farmers to process grains into consumer products. Through its massive agribusiness and food portfolio, Bunge is among the leading names globally in oilseed and specialty plant-based oils and fats. For a sense of scale, the company operates via a network of approximately 300 facilities spanning over 40 countries worldwide. With Bunge’s prominent role in the broader food processing industry, investors could be considering BG stock now.
If anything, Bunge is not sitting idly by as well. To begin with, the company declared a quarterly cash dividend of $0.525 per share just two weeks back. This follows its latest financial update last month. In which, Bunge posted a solid 17.1% jump in adjusted quarterly profit, beating Wall Street’s estimates. According to the company, its current momentum is thanks to strong demand for processed meal and oil across consumer markets.
Not to mention, Bunge is also now working with oil giant Chevron (NYSE: XOM) via a joint venture (JV). Through this JV the duo are looking to create renewable feedstocks via Bunge’s experience with oilseed processing and farmer network. When you pair this with Chevron’s expertise in fuels manufacturing, we could be looking at a powerful duo here. With Bunge seemingly kicking into high gear across the board, would BG stock be a buy-in your books?
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