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5 farming stocks for agricultural returns

Australian Agricultural Company Ltd (ASX: AAC)

Australian Agricultural Company, or AAC, is a provider of beef and other products. In response to the live cattle export ban with Indonesia, AAC’s earnings came under pressure and the company made a decision to build a processing facility near Darwin which is due for completion in the second half of 2014. After posting a loss in the first half of FY14, investors will be hoping for a turnaround story in the second half. Morningstar’s analysts’ consensus expects the company to return to profitability (in a big way) in the short term.

Tassal Group Limited (ASX: TGR)

Salmon farmer and producer Tassal Group is a first class Australian aquacultural company. After a strategic remodel, the company shifted its focus to growing consumption per capita here in Australia, much to the delight of investors. As consumption increases so too will its dividend. Keep this one on your watchlist.

Select Harvests Limited (ASX: SHV)

Select Harvests was one of the biggest success stories in 2013, notching up gains of around 300%! The almond producer took advantage of its excellent crop and pushed down costs while farmers in California, the world’s number-one region for almonds, battled with drought. At $6.24, it trades on a forwards price-earnings multiple of only 10 and can be expected to pay a bigger dividend in the next 12 months.

Ridley Corporation Ltd (ASX: RIC)

Ridley is a company who come across my screen on a regular basis. It’s Australia’s number-one provider of animal nutrition solutions. After what Chair John Spark described as a “complicated and busy year”, Ridley is returning to its “normal” and profitable self. In coming years dividends and earnings can be expected to grow thanks to both an organic and acquisitive growth model.

TFS Corporation Limited (ASX: TFC)

TFS Corporation is last on this list but definitely not least, having climbed around 289% in the past 12 months. It is currently leading the world in sustainable Sandalwood supply. In 2014 earnings are expected to jump following first harvest and sales. This week Canaccord Genuity put a price target of $3.34 on the stock. Currently it trades on $1.67.

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Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any of the mentioned companies.