Growing up in Kansas, I heard stories about life on the farm from my father and grandfathers.
They stressed the importance of growing quality crops and maximizing yields.
Of course, earning top dollar for crops and ensuring that the wheat, corn or soybeans were getting to food producers fast were important as well.
The chart above shows global commodity prices.
The index hit a low of 83.9 in April 2020 … right after the coronacrash.
In just two years, the index has climbed to 240.7 — its highest mark in a decade. That’s a 186.9% increase.
Commodity prices have shot through the roof in two years!
With prices rising, farmers need to know that their crops are fetching the best price and getting to food producers efficiently.
One of the most trusted names in buying, selling and transporting commodities is today’s Power Stock: Bunge Ltd. (NYSE: BG).
Bunge’s business model includes wheat, soybeans, sunflower seeds and corn.
Johann Bunge started the company in 1818 in Amsterdam.
It expanded to North America in 1918, where it’s still going strong.
Bunge stock scores a “Strong Bullish” 93 out of 100 on our Stock Power Ratings system, and we expect it to beat the broader market by 3X in the next 12 months.
BG Stock: Fundamental & Technical Ag Giant
My deep dive into Bunge stock revealed two noteworthy points:
- BG is an agriculture giant in Europe, as well as Brazil’s largest exporter of ag products.
- In 2021, Bunge brought in $2.07 billion in net income — an increase of 81% over 2020!
In addition to its strong momentum and low volatility, BG stock shows excellent fundamentals.
Its value is solid, with a low price-to-earnings ratio of 8.52. The agriculture industry average is three times more expensive, at 25.64.
BG’s price-to-sales ratio is 22 times lower than the industry average. It’s clear that this is an outstanding value play!
On top of that, BG’s one-year annual earnings-per-share growth rate of 82.1% and its annual sales growth rate of 42.8% make it a top-notch growth stock!
BG jumped as much as 43% since May 2021. Despite broader market headwinds, the stock remains 23.1% higher than a year ago.
That gain crushes the broader agriculture industry, which is down 3.2% during the same time.
Bunge Ltd. stock scores a 93 overall on our proprietary Stock Power Ratings system.
That means we’re “Strong Bullish” and expect it to beat the broader market by at least three times in the next 12 months.
Inflation is driving up the cost of goods and services everywhere, but commodities such as wheat and corn will always be in demand.
With its business model of buying, selling and storing these commodities, BG’s future as a growth and value stock is bright.
Bonus: The company pays a 1.95% forward dividend yield, so shareholders earn a dividend of $2.10 per year for every share they hold.
Stay Tuned: Biopharma Power Stock to Improve Americans’ Gut Health
Remember: We publish Stock Power Daily five days a week to give you access to the top companies that our proprietary Stock Power Ratings identify!
Stay tuned for the next issue, where I’ll share all the details on a pharmaceutical company that’s working to relieve suffering for millions of Americans.
Matt Clark, CMSA®
Research Analyst, Money & Markets
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