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After such an incredible year for the stock market in 2023, investors will certainly be looking for buy-the-dip candidates as a market pullback is to be expected at some point.

In this regard, a few agriculture stocks are attractive as they look poised to move higher even as a potential correction for the broader market looms. With that being said, let’s check out the opportunity in two pleasantly intriguing Zacks Agriculture-Operations Industry stocks.

Dole (DOLE)

Boasting a Zacks Rank #1 (Strong Buy) Dole’s stock is starting to look like a steal at its current levels of around $12 a share. Dole is a producer of fresh fruits and vegetables that are sold throughout North America, Europe, Latin America, and Asia.

Most known for producing fresh bananas and pineapples, Dole’s bottom line expansion is very intriguing at the moment with the company expected to round out fiscal 2023 with EPS up 19% to $1.16 per share versus $0.97 a share in FY22.  

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More eye-catching is that Dole’s stock trades at just 9.3X forward earnings and FY24 EPS is projected to jump another 14% to $1.33 per share. Even better, earnings estimate revisions for FY23 and FY24 are up over 11% in the last 60 days respectively. Plus, Dole currently offers a generous 2.58% annual dividend yield.

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Archer Daniels Midland (ADM)

As it relates to income investing, Archer Daniels Midland is a very worthy pick being a “dividend king” that has increased its payout for at least 50 consecutive years. Archer Daniels’ dividend increase is on 51 years and counting and its stock currently sports a Zacks Rank #2 (Buy).

Incorporated in 1923, Archer Daniels is one of the nation’s leading producers of agricultural products, food, and beverage ingredients. Seeing substantial growth in recent years it's noteworthy that FY24 EPS projections of $6.40 a share would represent 97% growth over the last five years with earnings at $3.24 a share in 2020. This is despite a dip forecasted on the company’s bottom line after what has been a pair of exceptional years of profitability with EPS at $7.85 in 2022 and FY23 end-of-the-year projections calling for earnings of $7.26 per share.

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Still, Archer Daniels’ stock looks undervalued trading at 10X forward earnings which is a slight discount to the Zacks Agriculture-Operations Industry average of 12X and well below the S&P 500’s 20.5X. Of course, the cherry on top is Archer Daniels' extremely reliable 2.47% annual dividend yield which is only at a 24% payout ratio indicating much more hikes should be in store in the years to come.

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Bottom Line

There is a lot of value in Dole and Archer Daniels Midland’s stock at current levels and their respectable dividends make them even more attractive to patient investors. Considering the rally in many other sectors these consumer staples stocks still appear to have more upside as the Zacks Agriculture-Operations Industry has made its way into the top 36% of over 250 Zacks industries.

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