Fertilizer prices are surging globally as a supply shortage rises because of the ongoing sanctions on Russia and Belarus. Russia has even halted exports of some fertilizers to punish western countries. While fertilizer stocks will benefit, they also face challenges amid a severe potash shortage as Belarus struggles to bring it to the market. Here are some top fertilizer shares to focus on.
Nutrien (NYSE: NTR) is a Canadian fertilizer company valued at over $58.8 billion. The firm’s revenue is expected to get a boost as fertilizer prices surge. Notably, its revenue was in an uptrend even before the current crisis in Ukraine.
For example, its revenue rose from $4 billion in 2017 to over $26 billion in 2021. It is also a highly profitable company as its net income has increased from $327 million to $3.1 billion. The Nutrien stock price has doubled in the past 12 months and there is a likelihood that it will do well in the coming months.
Still, caution is warranted considering that the potential demand and price boost have already been priced in. The average target by analysts is $104, which is slightly below the current level of $106.
Mosaic (NYSE: MOS) is another well-known fertilizer stock that has done well in the past few months. It has risen by 140% in the past 12 months. The company’s stock price has jumped sharply in the past few months as fertilizer prices have risen. Its performance is mostly because it has limited exposure in Russia. Instead, its mining operations are in Canada, Peru, Florida, and Louisiana.
Mosaic’s business has also been growing rapidly. Its total revenue has risen from $7.9 billion in 2017 to over $12.3 billion in 2021. Its profit has also risen to over $1.6 billion. Therefore, the Mosaic stock price will also likely keep rising.
CF Industries (NYSE: CF) is a leading fertilizer company that focuses on ammonia. The company uses the Haber-Bosch process to fix atmospheric nitrogen with hydrogen from natural gas to produce anhydrous ammonia. It sells ammonia, Urea Ammonium Nitrate (UAN), and urea to companies that manufacture fertilizer.
The CF stock price has risen by more than 137% in the past 12 months. Its revenue has also been in a strong growth path having risen from $4.13 billion in 2017 to over $6.1 billion in 2021. Its net income has also risen from $358 million to $917 million.