Agrium (NYSE: AGU) and Intrepid Potash (NYSE:IPI) are both basic materials companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitabiliy, institutional ownership, valuation and earnings.
Volatility & Risk
Agrium has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500. Comparatively, Intrepid Potash has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500.
Insider & Institutional Ownership
69.5% of Agrium shares are held by institutional investors. Comparatively, 42.4% of Intrepid Potash shares are held by institutional investors. 27.2% of Intrepid Potash shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This table compares Agrium and Intrepid Potash’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation and Earnings
This table compares Agrium and Intrepid Potash’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Agrium||$13.66 billion||0.92||$1.57 billion||$4.21||21.54|
|Intrepid Potash||$140.25 million||2.21||-$8.42 million||($0.81)||-2.96|
Agrium has higher revenue and earnings than Intrepid Potash. Intrepid Potash is trading at a lower price-to-earnings ratio than Agrium, indicating that it is currently the more affordable of the two stocks.
Agrium pays an annual dividend of $3.50 per share and has a dividend yield of 3.9%. Intrepid Potash does not pay a dividend. Agrium pays out 83.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Agrium has raised its dividend for 5 consecutive years.
This is a breakdown of current recommendations for Agrium and Intrepid Potash, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Agrium presently has a consensus price target of $104.27, suggesting a potential upside of 14.98%. Intrepid Potash has a consensus price target of $2.00, suggesting a potential downside of 16.67%. Given Agrium’s stronger consensus rating and higher probable upside, research analysts clearly believe Agrium is more favorable than Intrepid Potash.
Agrium beats Intrepid Potash on 12 of the 16 factors compared between the two stocks.
Agrium Company Profile
Agrium Inc. is a retailer of agricultural products and services in the United States, Canada, Australia, Argentina, Brazil, Chile and Uruguay and a multi-national producer and wholesale marketer of nutrients for agricultural and industrial markets. The Company’s segments include Retail and Wholesale. As of December 31, 2016, its Retail business unit marketed crop nutrients, crop protection products, seed, merchandise, application and other agronomic services through 1,500 retail locations in the United States, Canada, Australia, Argentina, Brazil, Chile and Uruguay. Its Wholesale business unit manufactures, mines and markets a range of nutrients, including nitrogen-based, potash and phosphate-based crop nutrient products. As of December 31, 2016, its Wholesale business unit owned and operated five North American nitrogen facilities, four located in Alberta, Canada and one in Borger, Texas, United States.
Intrepid Potash Company Profile
Intrepid Potash, Inc. is a producer of muriate of potash (potassium chloride or potash) and langbeinite (sulfate of potash magnesia) in the United States, which it markets and sells as Trio. The Company operates in the extraction, production and sale of potassium-related products. Its products are potash and Trio. It sells potash into three markets, including the agricultural market as a fertilizer input; the industrial market as a component in drilling and fracturing fluids for oil and gas wells and an input to other industrial processes, and the animal feed market as a nutrient supplement. Trio, which it mines from langbeinite ore, is its specialty fertilizer that delivers potassium, sulfate and magnesium in a single particle and has low chloride. The Company also produces salt, magnesium chloride, metal recovery salts and brine containing salt and potassium from its mining processes. It produces potash from three solar evaporation solution mining facilities.
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