3 Hot Fertilizer Stocks To Check Out In The Stock Market Now
As markets continue to steady from the impacts of the ongoing Ukraine-Russia war, investors may want to consider fertilizer stocks. For the most part, this part of the stock market today is coming into focus because of global supply concerns. Namely, another key resource, other than oil, facing global supply chain pressures now would be fertilizer. As most would know, it is a key component in the agriculture industry that helps produce the world’s food supplies. Accordingly, with Russia being among the top producers of fertilizers globally, the need for concern would be apparent. In essence, with global sanctions potentially weighing in on Russia’s exports amidst all this, fertilizer stocks could be worth noting.
For one thing, Canadian fertilizer titan Nutrien (NYSE: NTR) seems concerned as well. Overall, the company sees the ongoing invasion of Ukraine prolonging disruptions to global fertilizer supplies. In particular, it highlights global potash and nitrogen crop nutrients as key areas of concern. To combat this, interim CEO Ken Seitz notes that Nutrien is ready to boost potash production. The company is planning to do so in the case that it begins seeing persistent supply issues in Russia and Belarus. By current estimates, these are currently the world’s second- and third-largest potash-producing regions respectively.
Not to mention, Nutrien is also expecting to sell up to 14.3 million tonnes of potash this year. Should this be the case, it would mark a record year ahead for the fertilizer producer. As a result of all this, numerous fertilizer industry players across the board could be in focus now. Year-to-date, companies like ICL Group (NYSE: ICL) are currently looking at gains of over 15%. As such, I could see investors flocking to the top fertilizer stocks in the stock market today.
Fertilizer Stocks To Buy [Or Sell] Right Now
- Intrepid Potash Inc. (NYSE: IPI)
- CF Industries Holdings Inc. (NYSE: CF)
- The Mosaic Company (NYSE: MOS)
To begin with, we will be taking a look at Intrepid Potash, or IPI for short. In brief, IPI is a leading name in the global fertilizer manufacturing industry today. It is the largest U.S. producer of potassium chloride, which also goes by the name of muriate of potash. The likes of which serve as an essential nutrient for healthy crop development and an ingredient in animal feed. At the same time, IPI also mines potassium, magnesium, sulfur, and water products as well. All of which help it cater to the oil and gas industry alongside traditional agricultural markets.
In the larger scheme of things, as global potash reserves dwindle, demand for IPI’s offerings will likely increase. Given the sheer scale of IPI’s operations, IPI stock could be a go-to for investors looking to jump on the fertilizer stock train now. In turn, it would make sense that some are eyeing IPI ahead of its fourth-quarter financial update due next week. For comparisons now, we could look at the company’s previous fiscal quarter earnings.
In it, IPI posted solid figures across the board. For the quarter, its total revenue surged by over 75% year-over-year. Additionally, it posted massive jumps of over 138% in both net income and earnings per share. Providing some insight into the company’s current momentum is CEO Bob Jornayvaz. He highlights that higher fertilizer pricing, increasing oilfield sales, and solid cash flow generation are to thank. Moreover, Jornayvaz also mentions that IPI expects to see results from higher price levels in the current quarter. With all this in mind, would you consider IPI stock a top contender among fertilizer stocks today?
The Mosaic Company
Another top name in the fertilizer industry is The Mosaic Company. It is a world-leading integrated producer of concentrated phosphate and potash. For a sense of scale, Mosaic employs more than 13,000 people in six countries and serves customers in approximately 40 countries. Over the past six months, MOS stock has risen over 65%. Last week, the company reported its fourth-quarter and full-year results.
Jumping in, full-year revenues came in at $12.4 billion, rising by 42% year-over-year. This revenue increase is thanks to stronger pricing which offset lower volume. Next to that, Mosaic reported a net income of $1.63 billion, a huge boost from 2020’s income of $666 million. Accordingly, earnings per share were $4.27 compared against $1.75 from a year ago. In addition, the accelerated ramp-up of its new K3 potash mine is expected to be completed by the end of this quarter.
As such, the company expects production from the mine to total 5 million tons this year. Besides that, Phosphate segment earnings were $1.2 billion in 2021. Accordingly, its MicroEssentials fertilizer sales drove the earnings, with a new sales record of 3.3 million tons. Finally, its Mosaic Fertilizantes segment earnings were $745 million, up by 115%. Impressively, this segment managed to exceed its 2023 EBITDA contribution target two years ahead of schedule. Given the strong earnings, is MOS stock worth buying?
Finally, we have CF Industries. For the most part, the company engages in the manufacture of hydrogen and nitrogen products for various industrial applications. Notably, these include products for clean energy, emissions abatement, and fertilizers among others. Selling ammonia is the company’s core business up until this day. In fact, it is the largest ammonia producer in the U.S. On top of that, the company is looking to scale its ability to produce green and blue ammonia, which are more sustainable.
Last month, the company reported its financial results for the full year and fourth quarter. For starters, CF brought in sales worth $6.54 billion for the year, a stark increase from last year’s $4.12 billion. This signals an increase of approximately 37% in revenue. Sales were higher across all segments largely due to strong global demand as well as decreased supply availability. Moving on, net earnings were $917 million for the year or $4.24 per diluted share. Evidently, this is a big increase from last year’s $317 million and $1.47 respectively.
CF also continues to advance its plans to support the global hydrogen and clean fuel economy. It is doing so through the production of blue and green ammonia and other initiatives. One of which being the construction of North America’s first commercial-scale green ammonia project. The project has already commenced at the company’s Donaldsonville Complex and is expected to be complete by 2023. Given this news, would CF stock make your list of top fertilizer stocks to buy?