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January 2, 2019 | The Mosaic Company | MOS

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This week’s Stock of the Week is growing and cutting at the same time.

Agriculture Basics

The Mosaic Company (MOS) is one of the world’s largest producers of phosphate and potash fertilizers.

It was formed in 2004 through the merger of the fertilizer businesses of Cargill Inc. and IMC Global, giving it production facilities in North and South America. It recently bought Brazil-based Vale Fertilizantes to become the leading manufacturer and distributor of fertilizer in the fast-growing Brazilian market.

Fertilizer demand is rising worldwide as population surges. This should help revenue increase from $7.4 billion in 2017—it will likely be reported as $9.25 billion for 2018 and $9.8 billion this year. Mosaic is also improving its cost structure through a $575 million cost-cutting program and expects $1 billion in cumulative cash-flow improvement within two years—despite some uncertainty caused by continuing tariff disputes involving China and the US. The small dividend of $0.10/share/yr. recently yielded 0.4% and appears secure.

Fiscal year: December. Earnings per share: 2019 est./$2.25…2018 est./$1.73…2017/$1.07.

Peter W. Tuz, CFA, CFP, is president, Chase Investment Counsel, which manages $340 million, and portfolio manager of the $65 million Chase Growth Fund (CHASX) and $19 million Chase Midcap Growth Fund (CHAMX), Charlottesville, Virginia. ChaseInv.com

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