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Why You Should Add Mosaic (MOS) Stock to Your Portfolio
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The Mosaic Company’s (MOS - Free Report) shares have popped 20% over the past six months. We are positive on the company’s prospects and believe that the time is right for you to add the stock to the portfolio as it looks promising and is poised to carry the momentum ahead.
Mosaic currently has a Zacks Rank #2 (Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities for investors.
Let’s delve deeper into the factors that make this fertilizer maker an attractive choice for investors right now.
An Outperformer
Shares of Mosaic have rallied 57.4% over a year against the 32.1% rise of its industry. It has also outperformed the S&P 500’s 25.4% rise over the same period.
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Positive Earnings Surprise History
Mosaic has outpaced the Zacks Consensus Estimate in three of the trailing four quarters. In this time frame, it has delivered an average earnings surprise of roughly 38.1%.
Solid Growth Prospects
The Zacks Consensus Estimate for earnings for the current year for Mosaic is currently pegged at $5.06, reflecting an expected year-over-year growth of 495.3%. Moreover, earnings are expected to register 247.4% growth in the fourth quarter of 2021.
Superior Return on Equity (ROE)
ROE is a measure of a company’s efficiency in utilizing shareholder’s funds. ROE for the trailing 12-months for Mosaic is 13.8%, above the industry’s level of 11.1%.
Attractive Valuation
Valuation looks attractive as Mosaic’s shares are currently trading at a level that is lower than the industry average, suggesting that the stock still has upside potential.
Going by the EV/EBITDA (Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization) multiple, which is often used to value fertilizer stocks, Mosaic is currently trading at trailing 12-month EV/EBITDA multiple of 7.55, cheaper than the industry average of 9.8.
Growth Drivers in Place
Mosaic is benefiting from higher prices and demand for phosphate and potash. Higher agricultural commodity prices and attractive farm economics are driving demand for fertilizers globally. Global phosphate markets remain robust on solid demand and pricing dynamics. Tight availability along with firm demand is driving up phosphate prices globally. Potash prices have also strengthened on the back of robust global demand, aided by strong grower economics and higher crop prices.
The company, in its third-quarter call, noted that it expects strong agricultural commodity pricing trends to continue through the fourth quarter of 2021, driving demand for fertilizers. It also sees average realized prices for phosphate in the fourth quarter to be $55-$65 per ton higher than the prior quarter. Potash’s average realized prices are forecast to be $110-$130 per ton higher than the third quarter.
Mosaic is also taking actions to reduce costs amid a still-challenging operating environment. Its actions to improve its operating cost structure through transformation plans are expected to boost profitability. Transformational savings are also expected to drive margins in its Mosaic Fertilizantes segment.
Nutrien has an expected earnings growth rate of 212.2% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 10.6% upward over the last 60 days.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 73.5%, on average. NTR has rallied around 47% in a year.
AdvanSix has a projected earnings growth rate of 194.5% for the current year. ASIX's consensus estimate for the current year has been revised 5.9% upward over the last 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has rallied around 120% in a year.
Intrepid Potash has a projected earnings growth rate of 244.7% for the current year. The consensus estimate for IPI’s current year has been revised 3.3% upward over the last 60 days.
Intrepid Potash beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 132.9%, on average. IPI shares have surged around 154% in a year.
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Why You Should Add Mosaic (MOS) Stock to Your Portfolio
The Mosaic Company’s (MOS - Free Report) shares have popped 20% over the past six months. We are positive on the company’s prospects and believe that the time is right for you to add the stock to the portfolio as it looks promising and is poised to carry the momentum ahead.
Mosaic currently has a Zacks Rank #2 (Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities for investors.
Let’s delve deeper into the factors that make this fertilizer maker an attractive choice for investors right now.
An Outperformer
Shares of Mosaic have rallied 57.4% over a year against the 32.1% rise of its industry. It has also outperformed the S&P 500’s 25.4% rise over the same period.
Positive Earnings Surprise History
Mosaic has outpaced the Zacks Consensus Estimate in three of the trailing four quarters. In this time frame, it has delivered an average earnings surprise of roughly 38.1%.
Solid Growth Prospects
The Zacks Consensus Estimate for earnings for the current year for Mosaic is currently pegged at $5.06, reflecting an expected year-over-year growth of 495.3%. Moreover, earnings are expected to register 247.4% growth in the fourth quarter of 2021.
Superior Return on Equity (ROE)
ROE is a measure of a company’s efficiency in utilizing shareholder’s funds. ROE for the trailing 12-months for Mosaic is 13.8%, above the industry’s level of 11.1%.
Attractive Valuation
Valuation looks attractive as Mosaic’s shares are currently trading at a level that is lower than the industry average, suggesting that the stock still has upside potential.
Going by the EV/EBITDA (Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization) multiple, which is often used to value fertilizer stocks, Mosaic is currently trading at trailing 12-month EV/EBITDA multiple of 7.55, cheaper than the industry average of 9.8.
Growth Drivers in Place
Mosaic is benefiting from higher prices and demand for phosphate and potash. Higher agricultural commodity prices and attractive farm economics are driving demand for fertilizers globally. Global phosphate markets remain robust on solid demand and pricing dynamics. Tight availability along with firm demand is driving up phosphate prices globally. Potash prices have also strengthened on the back of robust global demand, aided by strong grower economics and higher crop prices.
The company, in its third-quarter call, noted that it expects strong agricultural commodity pricing trends to continue through the fourth quarter of 2021, driving demand for fertilizers. It also sees average realized prices for phosphate in the fourth quarter to be $55-$65 per ton higher than the prior quarter. Potash’s average realized prices are forecast to be $110-$130 per ton higher than the third quarter.
Mosaic is also taking actions to reduce costs amid a still-challenging operating environment. Its actions to improve its operating cost structure through transformation plans are expected to boost profitability. Transformational savings are also expected to drive margins in its Mosaic Fertilizantes segment.
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Nutrien Ltd. (NTR - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Intrepid Potash, Inc. (IPI - Free Report) , each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutrien has an expected earnings growth rate of 212.2% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 10.6% upward over the last 60 days.
Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 73.5%, on average. NTR has rallied around 47% in a year.
AdvanSix has a projected earnings growth rate of 194.5% for the current year. ASIX's consensus estimate for the current year has been revised 5.9% upward over the last 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has rallied around 120% in a year.
Intrepid Potash has a projected earnings growth rate of 244.7% for the current year. The consensus estimate for IPI’s current year has been revised 3.3% upward over the last 60 days.
Intrepid Potash beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. It has a trailing four-quarter earnings surprise of roughly 132.9%, on average. IPI shares have surged around 154% in a year.