I’m from Kansas, once known as the “breadbasket of the world,” where wheat fields were more abundant than tall buildings.
Kansas is also known for producing soybeans, coming in 10th in U.S. production in 2020.
And the U.S. was the world leader in soybean production until 2020, when Brazil, an emerging market in South America, took over.
This year, analysts project Brazil will produce 126.7 million metric tons of soybeans compared to the United States’ 121 million metric tons.
Experts project that soybean production in Brazil will jump 10.6% by 2029. Take a look:
Soybeans are Brazil’s largest export.
According to the Food and Agriculture Organization of the United Nations, crops — including soybeans — constitute 10% of the country’s gross domestic product and 20% of its labor force.
Today’s Power Stock is BrasilAgro (NYSE: LND).
BrasilAgro acquires, develops, sells and rents agricultural properties. The company also cultivates soybeans, sugarcane and corn.
LND scores a perfect 100 overall on our Stock Power Ratings system, and we expect it to beat the broader market by 3X in the next 12 months.
LND Emerging Market Stock: Strong Growth + Momentum
BrasilAgro stands out to me for two notable reasons:
- The stock just hit its 52-week high at $8.21 per share, surging 22.5% from March 30 to April 8.
- For the 12 months ending June 30, 2020, annual revenue was $115.5 million. BrasilAgro expects to grow revenue to $196.5 million by 2024 — a 70% increase over four years!
In addition to LND’s excellent growth potential and strong momentum, it’s a solid value and quality stock.
LND trades with a price-to-earnings ratio of 5.6 compared to its peers’ 27.4.
BrasilAgro’s return-ons (assets, equity and investment) are all double-digit positives. (Return on equity is 38.4%.) For contrast, agriculture industry averages are all double-digit negatives.
BrasilAgro has a trailing 12-month earnings-per-share (EPS) growth rate of 303.2% and a sales growth rate of 58.5%.
LND stock surged 96.8% in the past year. That well outpaces its agriculture peers, which grew 13.4%.
The stock is also trading $2 above its 50-day simple moving average, which is another bullish trend.
From March 30 to April 8, LND stock jumped up 22.5% after the company projected a 13.2% increase in soy production in 2022.
BrasilAgro stock scores a perfect 100 overall — it’s in the top 1% of all stocks in our universe.
That also means we’re “Strong Bullish” and expect it to beat the broader market by at least three times in the next 12 months.
The stock tops all but 3% of the stocks we rate in growth thanks to its impressive EPS and sales growth percentages — scoring a 97 on that metric.
Bonus: LND stock pays an impressive forward dividend yield of 10.9%! You’ll get a payout of $0.90 per share this year just to hold the stock.
Stay Tuned: Green Energy Commodity Stock
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 solid commodity stock that we like for its renewable energy exposure.
Matt Clark, CMSA®
Research Analyst, Money & Markets