Sunday, April 8

Week 40 - Dividend-paying Agriculture-related Companies

Situation: Because of an exploding global population, higher expectations for living standards, and global warming, the future will bring shortages of many kinds particularly as regards acreage of land under cultivation and availability of fresh water for population centers and crops.

In years past, food production kept up with population growth mainly because of improvements in technology. And it may be that newer technologies will see more widespread use, such as conversion of sewage into potable water (click here to read related story) and genetic conversion of seeds for crops (click here for a related story). But for investors, it is better to hedge that bet by learning more about agriculture-related companies that could be added to your investment portfolio. The attached Table is a list of companies that participate in the agricultural economy, pay a dividend, and are listed on a major US stock exchange. In some columns of the Table, you will notice data that is highlighted in red. This is to indicate “let the buyer beware.”

The 30 companies listed in the accompanying Table do not give a broad overview of agriculture. There are missing elements because the majority of farm production in the US is now carried out by farmer-owned co-operatives. Many have names that are familiar to grocery shoppers: Ocean Spray, Florida’s Natural, Sunkist, Land O’ Lakes, Tillamook. When added together, the 100 largest co-ops have combined annual revenues of more than $200 Billion. Over the coming year, one of the goals of our ITR blog is to present more discussions on agricultural and commodity-related companies that have a focus on food production or participate in the agricultural economy. We’ll start by gleaning more information about the companies that have become established well enough to pay a dividend.

Bottom Line: Hundreds of millions of people living in developing countries have experienced major improvements in their standard of living and are now interested in a greater availability of healthy foods. They can earn enough to pay for these products but can the planet provide enough?

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