What Are the Best Fertilizer Stocks? Our 3 Top Picks.
Some of the best fertilizer stocks are solid bets. For one, fertilizers are a necessary component for food production. Two, the world will always need food, and fertilizer stocks help ensure the world is fed. Three, product demand remains cons…
Some of the best fertilizer stocks are solid bets. For one, fertilizers are a necessary component for food production. Two, the world will always need food, and fertilizer stocks help ensure the world is fed. Three, product demand remains consistent no matter what’s going on at home or abroad. Plus, investors can sleep well at night knowing their portfolios are hedged against inflation and fears of recession again.
In fact, here are three of the best fertilizer stocks to own right now.
Global X Fertilizers/Potash ETF
Global X Fertilizers/Potash ETF (SOIL)
Source: SHUN_J / Shutterstock
One of my favorite ways to trade any hot sector is with an ETF. As I typically note in articles, ETFs offer greater diversification at less cost. With Global X Fertilizers/Potash ETF (NYSEARCA:SOIL), for example, I can own a piece of 28 holdings for about $8.20 a share, or $820 per 100 shares. Or, I could buy 100 shares of just one of its holdings – Mosaic Co. for about $5,300. With an expense ratio of 0.70%, the SOIL ETF offers exposure to Mosaic Co., Compass Minerals, Yara International, CF Industries, Wilmar International, and dozens more.
Severely undervalued, trading at half of sales, Archer-Daniels-Midland (NYSE:ADM) is one of the biggest farmland product companies in the U.S., with three key business segments, including ag services, carbohydrates solutions, and Nutrition.
ADM is also a dividend king, having just increased its quarterly dividend from 40 cents to 45 cents. The dividend is payable on Mar. 2 to shareholders of record on Feb. 9. This is now ADM’s 365th consecutive quarterly payment, a record of 91 years of uninterrupted dividends.
Better earnings continue to be solid. In its fourth quarter, the company’s profit shot up to $1.02 billion, or $1.84 a share, from $782 million, or $1.38 a share year over year. Adjusted EPS came in at $1.93 from $1.50. Revenue jumped to $26.23 billion from $23.09 billion. Analysts were only looking for EPS of $1.65 on sales of $25.28 billion.
Source: Pavel Kapysh/ShutterStock.com
Another one of the best fertilizer stocks to consider is Nutrien (NYSE:NTR), which produces agricultural, industrial, and feed nutrients. It’s also one of the biggest potash, nitrogen, and phosphate manufacturers. Better, NTR recently approved the buyback of 5% of outstanding common shares and announced a 10.4% dividend hike to 53 cents a share.
Also, according to its profile, the company owns more than 2,000 retail locations across North America, South America, and Australia. In addition, while Nutrien’s EPS of $14.23 beat expectations, revenues of $37 billion missed expectations.
And according to Ken Seitz, Nutrien’s President and CEO, “The outlook for our business is strong as we expect global supply issues to persist and demand for crop inputs to increase in 2023. We remain disciplined in our capital allocation approach as we position the company to best serve the needs of our customers while delivering meaningful returns for our shareholders.”
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.
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