Monsanto Company (MON), E I Du Pont De Nemours And Co (DD), Agrium Inc. (USA) (AGU): Score a Touchdown With These Stocks This Month

It’s true that Agrium Inc. (USA) (NYSE:AGU) has a major potash expansion program under way that will increase its annual capacity by a whopping 50%, but the project will not go online until the end of 2014 . That’s pretty far away. By then, the potash market’s dynamics may have changed completely, and it is nearly impossible to predict if things will go against or in favor of Agrium. Meanwhile, Agrium is likely to be least hurt among peers by any intermittent shocks in the industry.

More importantly, with nearly 70% of its sales coming from seeds, herbicides, and crop protection products, Agrium Inc. (USA) (NYSE:AGU) can tide over challenges like volatile fertilizer prices. A growing global presence also helps. Agrium made its way into Brazil market last year by acquiring Utilfertil, and already had a joint venture in Argentina since 1998. So like Monsanto, the approaching planting season in Latin America should bring good news for Agrium.

Furthermore, Agrium will likely take over Viterra’s Canadian agri-products retail business this month after acquiring its facilities in Australia recently. Clearly, the company is on a solid growth trajectory, and the near-term headwinds already seem baked into its stock price.

In fact, at 9 times earnings, Agrium is surprisingly cheaper than both PotashCorp and Mosaic, which are trading at a P/E of 11.6 and 9.6, respectively. I also wrote about Agrium’s diligent capital allocation policies some time back, including why investors can expect greater dividends from the company in the future. Agrium’s dividend has already grown at a staggering 1,700% clip in the past two years. That certainly makes the stock’s case stronger, and worthy of attention this month.

I’d advise you not to lose sight of these two stocks in the NFL frenzy. Happy watching!

The article Score a Touchdown With These Stocks This Month originally appeared on Fool.com and is written by Neha Chamaria.

Fool contributor Neha Chamaria has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 

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