The agriculture sector grew markedly last year, driven by increasing food prices and strong global demand. In fact, the U.S. agricultural industry recorded its highest export levels in 2021, valued at $177 billion.
Agriculture commodity prices are projected to remain strong in 2022 amid sustained demand, moderate supplies, and production fears related to weather. And as supply chain disruptions continue, the prices of consumer agricultural goods are expected to be on the rise this year.
Given the backdrop, it is advisable to invest in these agricultural stocks Nutrien Ltd. (NTR), Corteva, Inc. (CTVA), and CVR Partners, LP (UAN), which are expected to witness robust growth.
Nutrien Ltd. (NTR)
NTR in Saskatoon, Canada offers crop inputs, services, and solutions. The company provides potash, nitrogen, phosphate, and sulfate products, financial solutions, crop nutrients, crop protection products, seeds, and merchandise products. It operates through 2,000 retail locations in the U.S., Canada, South America, and Australia.
Last December, NTR completed debt redemption of $1.8 billion and a cash tender offer to purchase up to $300 million in debt securities. NTR also accelerated the repurchase of shares. And the company might utilize the free cash to strengthen its balance sheet, expand the business and provide superior shareholder returns.
In its fiscal third quarter, ended Sept.30, 2021, NTR’s sales increased 42.5% year-over-year to $6.02 billion. NTR’s gross margin grew 112.5% year-over-year to $2.17 billion. Its adjusted EBITDA increased 145.1% year-over-year to come in at $1.64 billion. The company’s net earnings increased 223.7% from the year-ago value to $726 million.
The $6.53 billion consensus revenue estimate for its fiscal fourth quarter, ended Dec.31, 2021 represents 69.5% year-over-year growth. The $2.36 consensus EPS estimate for the fiscal fourth quarter indicates 882.8% year-over-year growth from the same period in 2020. And the company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in three of the trailing four quarters.
Shares of NTR have increased 32.9% in price over the past year and closed yesterday’s trading session at $74.41.
NTR’s POWR Ratings reflect this promising outlook. The company has an overall rating of B, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
NTR has a B grade for Growth and Sentiment. Within the Agriculture industry, it is ranked #3 of 29 stocks. To see additional POWR Ratings (Stability, Value, Momentum, and Quality) for NTR, click here.
Corteva, Inc. (CTVA)
CTVA in Wilmington, Del., is in the agriculture business. The company operates in two segments: Seed; and Crop Protection. It provides trait technologies digital solutions to optimize product selection and maximize yield, herbicides, insecticides, nitrogen stabilizers, and range management herbicides. It operates in the U.S., Canada, Latin America, the Asia Pacific, Europe, and Africa.
On Feb. 15, 2022, CTVA entered a distribution contract with Pro Farm Technologies, a subsidiary of Marrone Bio. Under this agreement, CTVA will be the exclusive European distributor for Kinsidro Grow, a proprietary product developed by Pro Farm Technologies. This agreement is expected to expand CTVA’s global biological portfolio and business.
Last November, CTVA entered a new contract with Manna Irrigation to enhance effective irrigation practices. This agreement might help achieve the company’s sustainability goals by helping advance sustainable agriculture and water stewardship.
CTVA’s net sales increased 8.5% year-over-year to $3.48 billion in its fiscal fourth quarter, ended Dec.31, 2021. Its operating EBITDA improved 11% year-over-year to $262 million. The company’s net income grew 274.4% year-over-year to come in at $161 million. Its net income attributable to Corteva grew 287.8% year-over-year to $159 million. And its earnings per share of the common stock rose 340% year-over-year to $0.22.
Analysts expect CTVA’s revenue for its fiscal 2022 first quarter, ending March 2022 to come in at $4.51 billion, representing a 7.9% rise year-over-year. And analysts expect CTVA’s EPS for the current quarter to come in at $0.82, representing a 4% year-over-year rise.
The stock gained 7.6% in price year-to-date and 14.7% over the past year. CTVA closed yesterday’s trading session at $50.89.
CTVA has an overall rating of B, which translates to Buy in our proprietary rating system. It has a B grade for Quality. Among the 29 stocks in the Agriculture industry, it is ranked #4.
Click here to see the additional POWR Ratings for Momentum, Sentiment, Growth, Value, and Stability for CTVA.
CVR Partners, LP (UAN)
UAN provides nitrogen fertilizer products in the United States. The Sugar Land, Tex., company offers ammonia products, urea, and ammonium nitrate products. It serves customers, including agricultural customers, industrial customers, retailers, and distributors. CVR GP, LLC is the general partner of the company.
This month , UAN and CVR Nitrogen Finance Corporation, its indirect wholly-owned subsidiary, announced their redemption of the remaining balance of outstanding 9.3% senior secured notes due 2023.
In the fiscal third quarter, ended Sept. 30, 2021, UAN’s net sales increased 82.1% year-over-year to $144.72 million. Its operating income rose 1589.7% from the prior-year quarter to $46.32 million. And the company’s adjusted EBITDA increased 325.6% year-over-year to $63.75 million. Its net income grew 284.8% year-over-year to $35.03 million, and its earnings per unit rose 292.9% year-over-year to $3.28.
Analysts expect UAN’s revenue for the fiscal year 2021, ended Dec. 31, 2021 to come in at $346.95 million, representing a 0.7% rise year-over-year.
Over the past year, shares of UAN gained 349.7% in price and closed yesterday’s trading session at $98.94.
It is no surprise that UAN has an overall rating of B, which translates to a Buy in our POWR Ratings system. It has a Growth grade of A and a Sentiment Grade of B. In the 10-stock MLPs - Other industry, it is ranked #4. And this industry is rated A. Click here to see the additional POWR Ratings for UAN (Momentum, Stability, Quality, and Value).
NTR shares were trading at $74.53 per share on Wednesday afternoon, up $0.12 (+0.16%). Year-to-date, NTR has declined -0.89%, versus a -6.77% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
3 Resilient Agricultural to Consider Investing In: CVR Partners, Corteva, and Nutrien StockNews.com
