Intrepid Potash (NYSE: IPI) and Potash Corporation of Saskatchewan (NYSE:POT) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, earnings, profitabiliy and dividends.

Dividends

Potash Corporation of Saskatchewan pays an annual dividend of $0.40 per share and has a dividend yield of 2.4%. Intrepid Potash does not pay a dividend. Potash Corporation of Saskatchewan pays out 81.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider & Institutional Ownership

42.4% of Intrepid Potash shares are held by institutional investors. Comparatively, 59.4% of Potash Corporation of Saskatchewan shares are held by institutional investors. 27.2% of Intrepid Potash shares are held by insiders. Comparatively, 3.1% of Potash Corporation of Saskatchewan shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Intrepid Potash and Potash Corporation of Saskatchewan’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Intrepid Potash $140.25 million 1.91 -$8.42 million ($0.81) -2.69
Potash Corporation of Saskatchewan $3.82 billion 3.69 $1.25 billion $0.49 34.24

Potash Corporation of Saskatchewan has higher revenue and earnings than Intrepid Potash. Intrepid Potash is trading at a lower price-to-earnings ratio than Potash Corporation of Saskatchewan, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Intrepid Potash has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500. Comparatively, Potash Corporation of Saskatchewan has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500.

Profitability

This table compares Intrepid Potash and Potash Corporation of Saskatchewan’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Intrepid Potash -33.27% -14.71% -10.06%
Potash Corporation of Saskatchewan 9.41% 5.52% 2.60%

Analyst Recommendations

This is a summary of recent ratings and price targets for Intrepid Potash and Potash Corporation of Saskatchewan, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Intrepid Potash 0 0 0 0 N/A
Potash Corporation of Saskatchewan 2 12 6 0 2.20

Intrepid Potash currently has a consensus target price of $0.00, suggesting a potential downside of 100.00%. Potash Corporation of Saskatchewan has a consensus target price of $17.70, suggesting a potential upside of 5.46%. Given Potash Corporation of Saskatchewan’s higher probable upside, analysts clearly believe Potash Corporation of Saskatchewan is more favorable than Intrepid Potash.

Summary

Potash Corporation of Saskatchewan beats Intrepid Potash on 11 of the 14 factors compared between the two stocks.

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.

Potash Corporation of Saskatchewan Company Profile

Potash Corporation of Saskatchewan Inc. (PCS) is a fertilizer producer producing a range of primary crop nutrients, such as potash, nitrogen and phosphate. The Company operates through three segments: potash, nitrogen and phosphate. As of December 31, 2016, it owned and operated five potash operations in Saskatchewan and owned one in New Brunswick. Its nitrogen operations involve the production of nitrogen fertilizers and nitrogen feed and industrial products, including ammonia, urea, nitrogen solutions, ammonium nitrate and nitric acid. It has nitrogen facilities in Georgia, Louisiana, Ohio and Trinidad. Its phosphate operations include the manufacture and sale of solid and liquid phosphate fertilizers, phosphate feed and industrial acid, which is used in food products and industrial processes. It has phosphate mines and mineral processing plant complexes in Florida and North Carolina. As of December 31, 2016, the Company had four phosphate feed plants in the United States.

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