Strong demand pushes up this potash stock’s sales and earnings

Potash Corp. of Saskatchewan, symbol POT on Toronto, produces potash, phosphate and nitrogen for use in fertilizers. Saskatchewan has the world’s largest deposits of potash. The company also partly owns potash-related companies in Jordan, Israel and Chile.

Potash Corp. is one of the 5 agricultural investments we analyze in our free report, Commodity Investments: Fertilizer Stocks and Potash Stocks That Will Profit from Rising Food Demand.

In 2010, the potash stock’s revenue rose 64.4% to $6.5 billion from $4.0 billion in 2009 (all amounts except share price in U.S. dollars). The company earned $1.8 billion, or $5.95 a share, up 84.2% from $980.7 million, or $3.23 a share.

Potash Corp. spent $73.0 million last year to fight off a $40-billion hostile takeover bid by mining giant BHP Billiton Ltd. (New York symbol BHP). Ottawa eventually blocked the takeover.

Farmers planted more crops in response to higher demand for grains and oilseeds. The company’s potash sales jumped to 8.6 million tonnes in 2010 from 3.0 million tonnes in 2009. That offset a 21.8% drop in the average selling price of potash, to $315.57 a tonne from $403.56. However, the company expects potash prices to rise to $600 a tonne by 2013.

Potash Corp. plans to split its shares on a 3-for-1 basis in February. It will also raise its quarterly dividend by 110.0%, to $0.07 U.S. (post-split) from $0.033 U.S. The new annual rate of $0.28 U.S. (post-split) yields 0.5%.

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