Entering text into the input field will update the search result below

How Safe Is Farmland Partners' 6% Dividend Yield?


  • Farmland has been an attractive asset class over the last few decades.
  • Farmland Partners offers a high dividend yield, that is not fully covered by funds from operations though.
  • Farmland Partners looks rather expensive right here. Capital appreciation in the near future is thus not very likely.


Farmland (as an asset class) has delivered great returns in the past, thus Farmland Partners (NYSE:FPI) theoretically has the potential to do so as well, but shares still look rather expensive. The stock thus is mainly interesting for income focused investors, due to a very generous dividend yield.

Farmland Partners owns row crop farmland primarily, but the company also holds other assets:

The company's assets match what the total US crop market looks like pretty closely, with about 80% row crops and 20% permanent & specialty crops, such as almond trees.

In the long run farmland has been a very solid investment, $100 worth of land turned into $3000 over the last fifty years -- a 2,900% total return, or a little bit more than seven percent annually.

We see that there are peaks and times when farmland prices declines, but overall the match with an exponential growth function is very good.

Farmland also has been a very strong performance driver in shorter period of time, such as since 1990: Farmland returns were higher than even those of the NASDAQ, and only slightly lower than the returns the REIT sector delivered overall. At the same time farmland has pretty low volatility, which means the asset is attractive from a risk-reward standpoint (or at least has been in the past). Due to the world's population growing exponentially, and an increasing number of people earning increasing living standards, the growth story for food, and thus also agriculture in general, seems to be far from over. This is especially true as the total area that can be used for farming is not growing at all (rather shrinking on a global scale, due to desertification etc.), which means that the value of farmland should increase in the long run as well.

Since we

This article was written by

Jonathan Weber profile picture
Leader of Cash Flow Club
The Investment Community where your "Cash Flow is King"
According to Tipranks, Jonathan is among the top 0.5% of bloggers (as of January 10, 2022: https://www.tipranks.com/bloggers/jonathan-weber).

If you want to reach out, you can send a direct message here on Seeking Alpha, or an email to jonathandavidweber@gmail.com.


I work together with Darren McCammon on his Marketplace Service Cash Flow Club.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.