Bunge (NYSE: BG) and Intrepid Potash (NYSE:IPI) are both basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, profitability, valuation and risk.
Risk & Volatility
Bunge has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500. Comparatively, Intrepid Potash has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500.
This is a summary of current ratings and price targets for Bunge and Intrepid Potash, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Bunge currently has a consensus price target of $85.50, indicating a potential upside of 17.90%. Intrepid Potash has a consensus price target of $3.92, indicating a potential upside of 7.31%. Given Bunge’s stronger consensus rating and higher possible upside, analysts clearly believe Bunge is more favorable than Intrepid Potash.
Earnings and Valuation
This table compares Bunge and Intrepid Potash’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Bunge||$45.79 billion||0.22||$160.00 million||$0.89||81.48|
|Intrepid Potash||$157.61 million||3.02||-$22.91 million||($0.25)||-14.60|
Bunge has higher revenue and earnings than Intrepid Potash. Intrepid Potash is trading at a lower price-to-earnings ratio than Bunge, indicating that it is currently the more affordable of the two stocks.
Bunge pays an annual dividend of $1.84 per share and has a dividend yield of 2.5%. Intrepid Potash does not pay a dividend. Bunge pays out 206.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Intrepid Potash has raised its dividend for 16 consecutive years.
Institutional and Insider Ownership
79.4% of Bunge shares are held by institutional investors. Comparatively, 46.9% of Intrepid Potash shares are held by institutional investors. 1.3% of Bunge shares are held by insiders. Comparatively, 27.3% of Intrepid Potash shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This table compares Bunge and Intrepid Potash’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Bunge beats Intrepid Potash on 13 of the 17 factors compared between the two stocks.
Bunge Limited is an agribusiness and food company with integrated operations that stretch from the farm field to consumer foods. The Company operates through five segments: Agribusiness, Edible Oil Products, Milling Products, Sugar and Bioenergy, and Fertilizer. Its Agribusiness segment is an integrated, global business involved in the purchase, storage, transport, processing and sale of agricultural commodities and commodity products. Its edible oil products include packaged and bulk oils, shortenings, margarines, mayonnaise and other products derived from the vegetable oil refining process. Its milling products segment includes the production and sale of a range of wheat flours and bakery mixes. The Company is a producer and exporter of sugar. Through the Company’s operations in Argentina, it produces, blends and distributes a range of nitrogen, phosphate and potassium (NPK) fertilizers, including phosphate-based liquid and solid nitrogen fertilizers.
About Intrepid Potash
Intrepid Potash, Inc. is a producer of muriate of potash (potassium chloride or potash) and langbeinite (sulfate of potash magnesia) in the United States, which it markets and sells as Trio. The Company operates in the extraction, production and sale of potassium-related products. Its products are potash and Trio. It sells potash into three markets, including the agricultural market as a fertilizer input; the industrial market as a component in drilling and fracturing fluids for oil and gas wells and an input to other industrial processes, and the animal feed market as a nutrient supplement. Trio, which it mines from langbeinite ore, is its specialty fertilizer that delivers potassium, sulfate and magnesium in a single particle and has low chloride. The Company also produces salt, magnesium chloride, metal recovery salts and brine containing salt and potassium from its mining processes. It produces potash from three solar evaporation solution mining facilities.
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