Financial Analysis: Agrium (AGU) & Its Competitors

Agrium (NYSE: AGU) is one of 29 public companies in the “Agricultural Chemicals” industry, but how does it weigh in compared to its rivals? We will compare Agrium to related businesses based on the strength of its analyst recommendations, institutional ownership, earnings, risk, profitability, dividends and valuation.

Insider and Institutional Ownership

65.9% of Agrium shares are held by institutional investors. Comparatively, 49.0% of shares of all “Agricultural Chemicals” companies are held by institutional investors. 16.0% of shares of all “Agricultural Chemicals” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Agrium and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Agrium 4.22% 9.69% 3.54%
Agrium Competitors -1,305.72% -15.15% -8.04%

Dividends

Agrium pays an annual dividend of $3.50 per share and has a dividend yield of 3.2%. Agrium pays out 84.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Agricultural Chemicals” companies pay a dividend yield of 2.9% and pay out 69.6% of their earnings in the form of a dividend. Agrium has increased its dividend for 5 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Agrium and its rivals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Agrium 0 6 9 0 2.60
Agrium Competitors 178 736 894 32 2.42

Agrium currently has a consensus target price of $112.50, suggesting a potential upside of 4.08%. As a group, “Agricultural Chemicals” companies have a potential upside of 6.06%. Given Agrium’s rivals higher probable upside, analysts clearly believe Agrium has less favorable growth aspects than its rivals.

Volatility & Risk

Agrium has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500. Comparatively, Agrium’s rivals have a beta of 0.91, suggesting that their average stock price is 9% less volatile than the S&P 500.

Valuation and Earnings

This table compares Agrium and its rivals top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Agrium $13.67 billion $592.00 million 26.05
Agrium Competitors $3.88 billion $330.02 million -20.11

Agrium has higher revenue and earnings than its rivals. Agrium is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Summary

Agrium beats its rivals on 10 of the 15 factors compared.

Agrium Company Profile

Agrium Inc. is a retailer of agricultural products and services in the United States, Canada, Australia, Argentina, Brazil, Chile and Uruguay and a multi-national producer and wholesale marketer of nutrients for agricultural and industrial markets. The Company’s segments include Retail and Wholesale. As of December 31, 2016, its Retail business unit marketed crop nutrients, crop protection products, seed, merchandise, application and other agronomic services through 1,500 retail locations in the United States, Canada, Australia, Argentina, Brazil, Chile and Uruguay. Its Wholesale business unit manufactures, mines and markets a range of nutrients, including nitrogen-based, potash and phosphate-based crop nutrient products. As of December 31, 2016, its Wholesale business unit owned and operated five North American nitrogen facilities, four located in Alberta, Canada and one in Borger, Texas, United States.

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