Friday, August 26, 2011

Top Yielding Ethanol Stocks

Republican U.S. presidential candidate Michele Bachmann said that gas prices would drop below $2 per gallon if she she is elected. If that happens, there isn't much hope for ethanol as a substitute fuel. The price of crude oil has been trading around $85 a barrel for the last few days. However, with the tragedy of Hurricane Irene, concerns abound about oil production being affected causing rising prices. This could lead to an increase in the interest in and use of ethanol. Fortunately there are over 20 ethanol related stocks with more than a dozen paying dividends according to

The number one ethanol stock that comes to most investors' minds is Archer Daniels Midland (ADM), which has a corn processing division that produces ethanol from corn. The stock trades at 8.2 times forward earnings and provides investors with a yield of 2.3%. Revenues were up a strong 46.6% for the latest quarter year-over-year, however earnings were down 14.6%.

The Andersons (ANDE), an Ohio based company, is involved in the management of ethanol production facilities and grain and ethanol trading. The stock has a forward price to earnings ratio of 8.9 and a yield of 1.2%. Earnings for the latest quarter were up an incredible 79.7% on a 65% rise in revenues.

Bunge Ltd. (BG) is a White Plains, New York company founded in 1818 that produces ethanol from sugarcane. The stock has a forward P/E of 9 and a yield of 1.7%. Revenues for the latest quarter were up 32% but earnings were down 82%.

A free list of stocks related to ethanol in some way, which can be downloaded, updated and sorted, can be found at

Disclosure: Author did not own any of the above at the time the article was written.


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