Analyzing Potash Co. of Saskatchewan (POT) and Ciner Resources (CINR)
Potash Co. of Saskatchewan (NYSE: POT) and Ciner Resources (NYSE:CINR) are both basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, risk, institutional ownership, earnings, dividends and analyst recommendations.
Valuation & Earnings
This table compares Potash Co. of Saskatchewan and Ciner Resources’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Potash Co. of Saskatchewan||$4.46 billion||3.51||$323.00 million||$0.55||33.89|
|Ciner Resources||$475.20 million||1.07||$41.40 million||$1.90||13.56|
Potash Co. of Saskatchewan has higher revenue and earnings than Ciner Resources. Ciner Resources is trading at a lower price-to-earnings ratio than Potash Co. of Saskatchewan, indicating that it is currently the more affordable of the two stocks.
This table compares Potash Co. of Saskatchewan and Ciner Resources’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Potash Co. of Saskatchewan||10.21%||5.01%||2.43%|
Potash Co. of Saskatchewan pays an annual dividend of $0.40 per share and has a dividend yield of 2.1%. Ciner Resources pays an annual dividend of $2.27 per share and has a dividend yield of 8.8%. Potash Co. of Saskatchewan pays out 72.7% of its earnings in the form of a dividend. Ciner Resources pays out 119.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This is a summary of current ratings and target prices for Potash Co. of Saskatchewan and Ciner Resources, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Potash Co. of Saskatchewan||1||4||7||0||2.50|
Potash Co. of Saskatchewan presently has a consensus target price of $19.60, suggesting a potential upside of 5.15%. Ciner Resources has a consensus target price of $25.00, suggesting a potential downside of 2.99%. Given Potash Co. of Saskatchewan’s higher probable upside, equities analysts clearly believe Potash Co. of Saskatchewan is more favorable than Ciner Resources.
Volatility and Risk
Potash Co. of Saskatchewan has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500. Comparatively, Ciner Resources has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.
Institutional & Insider Ownership
59.8% of Potash Co. of Saskatchewan shares are owned by institutional investors. Comparatively, 9.0% of Ciner Resources shares are owned by institutional investors. 3.1% of Potash Co. of Saskatchewan shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Potash Co. of Saskatchewan beats Ciner Resources on 10 of the 16 factors compared between the two stocks.
Potash Co. 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.
Ciner Resources Company Profile
Ciner Resources LP, through its subsidiary, Ciner Wyoming LLC (Ciner Wyoming), produces soda ash and serves a global market from its facility in the Green River Basin of Wyoming. The Company processes trona ore into soda ash, a raw material in flat glass, container glass, detergents, chemicals, paper and other consumer and industrial products. As of December 31, 2016, its Green River Basin surface operations were situated on approximately 880 acres in Wyoming, and the Company’s mining operations included approximately 23,500 acres of leased and licensed subsurface mining area. The Company’s mining leases and license are located in two mining beds, designated by the United States Geological Survey as beds 24 and 25, at depths of 800 to 1100 feet, respectively, below the surface. The Company uses a continuous mining technique to mine trona and roof bolt the ceiling simultaneously. The Company’s soda ash is shipped by rail or truck from its Green River Basin operations.
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