Can Agrium Inc. (USA) Increase Your Portfolio’s Yield?

About the Agrium Stock

The recent quarterly results by Agrium Inc. (NYSE:USA) are definitely impressive, and more than everything else have enforced positive expectations from the agricultural products business. The company took appropriate advantage of higher crop prices in Northern America, which boosted the performance of its retail segment. This interesting article makes a significant point about the presence of nitrogen-fertilizer business in Agrium’s portfolio apart from potash production, which provides a viable hedging option. The U.S demand for nitrogen is expected to be pretty strong as a result of high crop acreage, which puts Agrium Inc. (NYSE:USA) in a strategic position to meet demand.

In its earnings call, management stated that its dividend payment had reached $2 on an annualized basis, which in fact demonstrates its commitment to growing total shareholder returns. Growth in dividend payout is correlated to growth in overall business, making it possible for the investors to gauge and forecast performance in the oncoming quarters. Another point for consideration is maintenance of gross profit at 2011 levels on the back of a vigilant cost management structure and higher sale volumes.

The Bottom Line

There are certain favorable points I have mentioned below that reinforce my confidence in Agrium’s performance:

• Favourable conditions for market growth and Agrium’s strategic position to gain from viable opportunities.
• Low risk business model owing to the presence of nitrogen-fertilizers.
• Solid dividend history
• Integrated product strategy

In light of these points, I would suggest Agrium Inc. (NYSE:USA) be included in your portfolio and is written by Mihir Mehta.

The article Can Agrium Increase Your Portfolio’s Yield? originally appeared on Fool.com.

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