How to Invest in Cargill

Cargill is a giant in the agricultural industry. It generates $177 billion in annual revenue by providing food, ingredients, agricultural solutions, and industrial products to farmers and other customers. According to Forbes, Cargill's sales total makes it the biggest privately held company in the country.

The agricultural giant has a long and rich history. William Cargill founded the company in 1865, and it has remained in the hands of his descendants. While there has been some internal pressure to complete an initial public offering (IPO) over the years, Cargill has found ways to remain private.

It seems unlikely that Cargill will go public anytime soon. However, investors interested in the agricultural giant have some options to consider. Here's a look at everything you need to know about investing in Cargill should it go public and how to invest in stocks that are capitalizing on the trends that have enabled it to grow into the country's largest private company.

Is Cargill publicly traded?

Is Cargill publicly traded?

Cargill is not a publicly traded company. It is a private, family-owned business. Descendants of the company's founders (the Cargill and MacMillan families) own an estimated 90% of its shares, with employees owning the remainder. Forbes estimates that Cargill is the largest private company in America, with $177 billion in annual revenue.

When Will Cargill IPO?

When Will Cargill IPO?

Cargill didn't have an IPO on the calendar as of early 2024. While there has been pressure on the company to go public, it has found ways to stay private. In 1993, the company started an employee stock purchase plan that allowed owners to cash in some of their shares.

The company also spun off its majority stake in fertilizer producer The Mosaic Company (MOS -0.1%) in 2011. The transaction allowed existing Cargill shareholders to exchange their shares for the publicly traded Mosaic, which they could sell. Given Cargill's success in remaining private, it might never complete an IPO.

How to buy

How to buy Cargill stock

Unless you're an eligible employee, you can't buy Cargill stock. However, there are many ways to invest in the agricultural sector to capitalize on the same factors driving Cargill's growth. Three notable Cargill alternatives are:

The Mosaic Company

The Mosaic Company was formed in 2004 through the merger of fertilizer company IMC Global and Cargill's crop nutrition business. Cargill spun off its interest in The Mosaic company to shareholders in 2011.

So, while an investment in The Mosaic Company doesn't provide investors with direct exposure to Cargill, it does give them an interest in one of its legacy businesses. Today, Mosaic is a leader in potash and phosphate mining, nutrients crucial to helping feed crops and increase their yields.

Bunge Global

Bunge Global (BG -1.28%) is the global leader in oilseed processing and a top producer and supplier of specialty plant-based oils and fats. It helps farmers and other companies produce food, feed, and fuel.

Bunge Global expanded its worldwide reach in 2023 by acquiring agricultural products company Viterra with the help of several strategic and financial partners. The deal increased its diversification, putting it in a better position to meet the needs of farmers and other customers in the future.

Archer-Daniels-Midland Company

Archer-Daniels-Midland Company (ADM -1.48%) is a worldwide leader in human and animal nutrition. The company operates several agricultural businesses, including ag services and oilseeds, carbohydrate solutions, and nutrition. The company's products include flours, grains, starches, and sweeteners for human nutrition, animal feeds, and premix pet foods.

Investors who want to buy one of these Cargill alternatives can purchase shares in any brokerage account. Here's a step-by-step guide on how to invest in companies like Cargill.

Step 1: Open a brokerage account

You'll need a brokerage account before buying shares of any company. If you still need to open one, here are some of the best-rated brokers and trading platforms. Take your time to research the brokers to find the best one for you.

Step 2: Figure out your budget

Before making your first trade, you'll need to determine a budget for how much money you want to invest. You'll then want to decide how to allocate that money. The Motley Fool's investing philosophy recommends building a diversified portfolio of 25 or more stocks you plan to buy and hold for at least five years.

You don't have to get there on the first day. For example, if you have $1,000 available to start investing, you might want to begin by allocating that money equally across at least 10 stocks and then grow from there.

Step 3: Do your research

It's essential to thoroughly research a company before buying its shares. You should learn about how it makes money, its competitors, its balance sheet, and other factors to ensure you have a solid grasp on whether the company can grow value for its shareholders over the long term.

Step 4: Place an order

Once you've opened and funded a brokerage account, set your investing budget, and researched the stock, it's time to buy shares. The process is relatively straightforward. Go to your brokerage account's order page and fill out all the relevant information, including:

• The number of shares you want to buy or the amount you want to invest to purchase fractional shares.
• The stock ticker (MOS for Mosaic, BG for Bunge, and ADM for Archer-Daniels-Midland).
• Whether you want to place a limit order or a market order. The Motley Fool recommends using a market order since it guarantees you buy shares immediately at market price.

Once you complete the order page, click to submit your trade and become a shareholder in one of these agricultural stocks while you wait to see whether Cargill ever goes public.

If Cargill goes public, investors will follow a similar process to buy its IPO stock. If shares become available after an IPO, you would fill out the order page at your brokerage account with Cargill's selected stock ticker and submit your trade.

Profitability

Is Cargill profitable?

Even though Cargill is a private company, it publicly discloses some of its financial results in its annual report. In its annual report posted in August 2023, the global agribusiness said it generated $177 billion in revenue during its most recent fiscal year, an increase of 7% from the previous year.

According to documents seen by Bloomberg, the company was profitable. It produced $3.8 billion in net income during its last fiscal year. While that was a 43% decline from the $6.7 billion in profit it posted the previous year, it was still Cargill's fourth-best year of profitability ever. Higher interest expenses, restructuring costs, and other factors weighed on its earnings.

Cargill's consistent profitability has allowed it to remain private. As long as the company can continue to fund its operations and growth internally through retained earnings, it will likely stay private since it doesn't need capital from outside investors to support its business.

Should I invest?

Should I invest in Cargill?

You can't invest in the private, family-owned company unless you are an eligible Cargill employee. Given its long history as a private company and its ability to avoid the pressure of going public, non-employees might never get the chance to invest in Cargill.

However, the general investing public does have alternatives to investing in Cargill. They could buy shares of publicly traded rivals, like Archer-Daniels-Midland or Bunge, or consider investing in a company built on Cargill's legacy in Mosaic. Those agricultural stocks would all benefit from the same trends driving Cargill's growth.

ETF options

ETFs with exposure to Cargill

Many investors would prefer to invest passively instead of actively managing a portfolio of stocks. Exchange-traded funds (ETFs) are an easy way to be a passive investor.

Since Cargill is a private company, you can't gain exposure to its stock through an ETF. However, you can buy an ETF focused on agricultural stocks. Two of the largest agribusiness ETFs are:

• VanEck Vectors Agribusiness ETF (MOO 0.25%): This ETF aims to track the agribusiness sector's performance, including companies involved in agri-chemicals, animal health, and fertilizers and trading agricultural products. It held shares of 59 companies in early 2024, including Archer-Daniels-Midland (5.6% of its holdings) and Bunge Global (3.6%) within its top 10. The fund had a 0.53% net ETF expense ratio.
• iShares Msci Global Agriculture Producers ETF (VEGI 0.06%): The fund provides exposure to companies producing fertilizer and agricultural chemicals, industrial products like farm machinery, and packaged foods and meats. It held shares of 152 companies in early 2024, including Archer-Daniels-Midland (its second-largest holding at 7.9% of its assets), Bunge Global (eighth-largest at 3% of its assets), and Mosaic (10th-largest at 2.3% of its holdings). The ETF had a 0.39% expense ratio.

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The bottom line on Cargill

Cargill is a behemoth in the agricultural sector. It currently tops the list as the largest privately held company in the country by revenue. It likely won't make the shift to the public markets anytime soon. Although that means the investing public can't buy Cargill shares, there are many other ways to invest in the agricultural sector.

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