Strong Demand and Prices Bring Boom Time for Fertilizers: 4 Picks
The Mosaic CompanyMOS: The Florida-based company is well positioned to leverage increasing global demand for fertilizers and higher realized prices in its businesses. Strong prices for phosphate and potash should drive its results this year. Actions to improve its operating cost structure through transformation plans are also expected to boost profitability.
The company has expected earnings growth of 450.6% for the current year. The Zacks Consensus Estimate for current-year earnings for the company has moved up 45.3% in the past 60 days. It beat the Zacks Consensus Estimate in each of the trailing four quarters at an average of roughly 43%.
Nutrien Ltd.NTR: This Canada-based company is well placed to benefit from solid demand and higher prices for fertilizers, especially potash. It is expected to gain from strong potash sales volumes this year on the back of solid domestic and overseas demand. Nutrien is also poised to gain from acquisitions, cost efficiency and increased adoption of its digital platform. The company also continues to expand its footprint in Brazil through acquisitions, including Tec Agro.
Intrepid Potash, Inc.IPI: The Colorado-based company is gaining from strong commodity prices and rising potash demand and pricing, which is supporting its margins. A recovery in economic activities and the strength in commodity prices are driving demand for its specialty fertilizer, Trio. Higher prices for potash and Trio are expected to drive its bottom line.
The company has expected earnings growth of 251.3% for the current year. The Zacks Consensus Estimate for earnings for the current year has been revised 147.3% upward over the last 60 days. The company has a trailing four-quarter earnings surprise of 90.5%, on average.
Sociedad Quimica y Minera de Chile S.A.SQM: The Chile-based company should benefit from being the low-cost producer of potassium chloride, potassium sulfate and potassium nitrate. Moreover, higher demand is expected to boost sales volumes in its specialty plant nutrition business this year. Rising demand is also expected to drive prices of potassium chloride.
The company has expected earnings growth of 46.7% for the current year. The consensus estimate for the current year has been revised 8.3% upward over the last 60 days. The company also has an expected long-term earnings per share growth rate of 32.5%.