POT Investment Analysis Report & Stock Research, Potash Corp. of Saskatchewan, Inc.

Potash Corporation of Saskatchewan, Incorporated (POT)

POT Stock Report

2-Year Price History

View Larger POT Chart
NYSE:POT
$106.20
(2/9 3:13PM)
+4.6%
Open$103.53 Mkt Cap$30.0 Billion
High$106.95 52Wk High$126.47
Low$102.84 52Wk Low$63.65
Volume6.8 Million Avg Vol 10D8.2 Million

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POT Revenue

For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at POT through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 4.94x and 1.83x respectively.

Utilizing this range we can see that POT’s current Price to Sales per share ratio of 6.45x is high enough compared with historical norms of POT to cause some concern. The current Price to Sales per share is near the upper end of the historical range. In our eyes, this is a negative factor because it is more likely that it will return to the normal range than continue rising outside of the range. At current sales per share levels, we would need to see a decline in the Price to Sales ratio of 90% merely to return POT to its historical average.

POT Cash Earnings

As the old saying goes, "Cash is King!" We look at reported Cash Earnings, but the main emphasis of our analysis involves stripping out non-cash events such as depreciation from our cash earnings analysis. This helps us view the cash flows more clearly. Nevertheless, an analysis of Cash Earnings (both reported and otherwise) is absolutely pivotal to assessing a company's value, and currently POT is below its historical average multiple of cash earnings as calculated by Ockham. Similar to our analysis of sales per share, Ockham looks at the last 10 years of cash earnings levels for POT to identify where the current high and low price levels have been historically in relation to profit per share. Again, we utilize a weighted average methodology which relies more heavily on recent years of data. This weighted average framework provides us with an average high Price to Cash Earnings ratio per share of 23.27 and a 10.30 low over the same period.

At its current price of $103.48, the Price to Cash Earnings ratio of 16.64 per share for POT is relatively attractive. At current profitability levels, a drop in share price would only improve our future expectations. Again, Cash Earnings is an incredibly valuable metric, and management at POT must continue on its generation to improve our overall outlook for the stock.

POT Dividends

A strong dividend payment history is looked upon as a favorable characteristic on a company’s future and potentially can receive a positive Ockham rating. That being said, we don't require dividend payments for company's whose management has elected to forgo them entirely.

When reviewing dividend yields for POT, we compare the historic high and low levels over the past, which is similar to our evaluation of Sales and Cash Earnings per share. Paying a dividend is not necessary for any company, but changes in dividend often can lend clues as to the health of the business. A rising dividend is a strong sign for an established company, as it reflects management's confidence in the company. POT’s estimated annual dividend is $0.40 resulting in a current dividend yield of 0.39%. The highest dividend yield from POT over recent history was 2.05% while the lowest dividend yield was 0.17%. While it is quite common for a growth stock to pay no dividend at all, but for a mature company such as POT that has a history of paying dividends it is disappointing to see their dividend yield drop so significantly. At this time, the current dividend yield is 64.86% below the median yield.

Peer Comparison

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Potash Corp. of Saskatchewan, Inc. Industry Grouping

(2/8/2010)
Company Ticker Market Cap (Ml) Latest
Price
Price/Cash Earnings Price/Sales 5-Yr. Rev.
Growth Rate
5-Yr.
Avg. ROE.
Current 10-Yr. Range* Current 10-Yr. Range*
Peer Company Averages (not including POT) 17.32 4.94 » 28.71 1.95 0.53 » 3.26 10.13% 19.33%
*10 year range does not include current year values
Potash Corp. of Saskatchewan, Inc. POT $30.0 Billion $101.51 16.64 3.66 » 45.44 6.45 1.19 » 9.19 30.82% 31.04%
The Dow Chemical Company DOW $29.9 Billion $26.18 19.22 4.27 » 26.19 0.68 0.12 » 1.29 12.00% 18.68%
DuPont E.I. DE Nemours & Company DD $29.1 Billion $32.19 13.58 5.42 » 17.64 1.13 0.44 » 2.06 2.49% 26.10%
Syngenta AG for NVS SYT $24.7 Billion $51.06 13.44 5.20 » 17.58 3.44 0.65 » 2.78 12.06% 14.54%
The Mosaic Company MOS $24.3 Billion $54.54 28.74 3.61 » 67.26 1.95 0.31 » 7.05 n/a 14.75%
Praxair, Inc. PX $22.7 Billion $74.14 11.62 6.20 » 14.88 2.54 1.14 » 3.09 13.98% 22.58%
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Mad Money

Income Investors: A Discussion of POT and Dividends on Mad Money

If POT's dividends are important to you, take a look at the news as they were the topic of conversation on Mad Money.

Premium Content - please sign up for Ockham PREMIUM to gain full access and to see what Mad Money said about POTASH CORP. OF SASKATCHEWAN, INC.

Learn About RazorWire?
Closing Bell

Stay Current on POT's News on Closing Bell

The latest news from Closing Bell on POT is available through Ockham's news analytics platform RazorWire.

Premium Content - please sign up for Ockham PREMIUM to gain full access and to see what Closing Bell said about POTASH CORP. OF SASKATCHEWAN, INC.

Learn About RazorWire?
Power Lunch

Holding POT Stock? See What Is Being Discussed on Power Lunch

The latest news from business television and influential blogs is always available through Ockham's RazorWire, and this news is in relation to Potash Corporation of Saskatchewan, Incorporated.

As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, POT has been less covered in the news compared to the rest of our universe of stocks. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on POT. The Motley Fool CAPS data suggests that investors believe Potash Corporation of Saskatchewan, Incorporated will beat the market in the foreseeable future.

“… Show you some of the fertilizer companies out there, overnight one of the big companies, one of the big russian POTASH companies announced they were going to be raising prices ... …”

Fast Money

POT News Mentioned on Fast Money Recently

The latest news from Fast Money on POT is available through Ockham's news analytics platform RazorWire.

The Motley Fool CAPS data suggests that investors believe Potash Corporation of Saskatchewan, Incorporated will beat the market in the foreseeable future. Please be aware that POT is trading off $5.77 today, and is clearly being affected by the latest news. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on POT. When looking at our entire coverage universe and ranking stocks by the attention they receive on RazorWire, it is clear that Potash Corporation of Saskatchewan, Incorporated has been talked about more than normal recently.

“… dip today. . >>> a buying opportunity in POTASH. Pot. >> qualcomm, big capitulation day. >> i'm along with him on qualcomm. …”

Fast Money

Fast Money: Discussion of Analysts and Potash Corporation of Saskatchewan, Incorporated

Wall Street analysts can have a huge affect on stocks, and today Fast Money talked about an analysts' opinion in relation to POT.

Potash Corporation of Saskatchewan, Incorporated receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. Ranking all stocks in terms of news coverage offers some interesting data. In the case of POT, it is getting significantly more attention in recent news coverage than we are used to seeing.

“… got a drop from POTASH. Down 5%. > > POTASH has no pricing action here now. Look at the grain futures to guide you what to do with this stock. …”

Seeking Alpha Wall St Breakfast

Earnings News Regarding Potash Corporation of Saskatchewan, Incorporated Noted on Seeking Alpha Wall St Breakfast

We thought our clients would like to be aware of a news story involving POT's earnings per share.

Potash Corporation of Saskatchewan, Incorporated receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. The latest news on POT has created quite a stir as the stock is trading $6.04 higher in today's session. Ranking all stocks in terms of news coverage offers some interesting data. In the case of POT, it is getting significantly more attention in recent news coverage than we are used to seeing.

“… (PR) POTASH (POT): Q4 EPS of $0. 80 beats by $0. 02. Revenue of $1. 1B (-41%) vs. $1. 07B. (PR) Taiwan Semi (TSM): Q4 EPS of $0. 19 in-line. Revenue of $2. 8B (+43%) ... …”

Power Lunch

News Breaking on Potash Corporation of Saskatchewan, Incorporated on Power Lunch

The latest news from business television and influential blogs is always available through Ockham's RazorWire, and this news is in relation to Potash Corporation of Saskatchewan, Incorporated.

The Motley Fool CAPS data suggests that investors believe Potash Corporation of Saskatchewan, Incorporated will beat the market in the foreseeable future. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on POT. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, POT has been less covered in the news compared to the rest of our universe of stocks.

“… yeah, POTASH, broad point pounded the table and soleil slammed the door on them. The market's been very weak. The name continues to see active buying of at and out of the money ... …”

Closing Bell

Potash Corporation of Saskatchewan, Incorporated Was Talked About by Closing Bell

News has broken via the television and viral blogs regarding POT, so investors should take an interest in learning what was said.

The Ockham valuation currently has a Fairly Valued stance on POT because it trades within the price range that we would expect given current market conditions and fundamentals. In comparison to the other stocks that we follow, Potash Corporation of Saskatchewan, Incorporated has seen more discussion in relation to its normal ranking among the group. Be aware that the news sources we track are focusing on this stock more often these days. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey.

“… POTASH, the stock finished looks to be a fractional loser there. And office supply companies, one of the bright spots today officemax was upgraded by jpmorgan off of the open ... …”

Closing Bell

Analyst Opinion on POT the Topic for Closing Bell

When the television or blog talks about an analysts' opinion it could have a major impact on the stock.

Potash Corporation of Saskatchewan, Incorporated receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. Ranking all stocks in terms of news coverage offers some interesting data. In the case of POT, it is getting significantly more attention in recent news coverage than we are used to seeing. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey.

“… And POTASH, the price target was raised over at rbc. Let's talk about some of the positive stories that we've been following today. …”

The Call

The Call: Discussion of Analysts and Potash Corporation of Saskatchewan, Incorporated

Analysts' opinions can often carry a lot of weight, especially when they make major news and are covered on The Call.

In comparison to the other stocks that we follow, Potash Corporation of Saskatchewan, Incorporated has seen more discussion in relation to its normal ranking among the group. Be aware that the news sources we track are focusing on this stock more often these days. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. The Ockham valuation currently has a Fairly Valued stance on POT because it trades within the price range that we would expect given current market conditions and fundamentals.

“… Agrium to the down side by more than two bucks and POTASH is having a pretty good day as the price target was raised over it, rbc. …”

View All Potash Corp. of Saskatchewan, Inc. Stock News

Key Fundamentals

POT - Potash Corporation of Saskatchewan, Incorporated Fundamentals
Price (2/9 3:13PM) $106.20
Volume (2/9 3:13PM) 6.8 Million
Last Close Price $101.51
10 Day Average Volume 8.2 Million
13 Week Price Range $98.27 - $126.47
52 Week Price Range $63.65 - $126.47
LTM Revenue $4.7 Billion
 
Shares Outstanding (12/2008) 295.9 Million
Market Capitalization $30.0 Billion
Shares Held By Institutions 224.9 Million
Institutional Holders 798
% Shares Held By Institutions 76%
Earnings Per Share (EPS) $11.01
P/E Ratio 21.40
Book Value Per Share $19.78
 
Gross Margin 40.60%
Annual Dividend 0.40
Dividend Yield 0.40%
Beta 1.25
Fiscal Year Ends December

About Potash Corp. of Saskatchewan, Inc.

Potash Corporation of Saskatchewan, Incorporated is considered to operate in the Basic Materials sector. They specifically operate in the Agricultural Chemicals business segment contained within the Chemicals industry.

An integrated fertilizer and related industrial and feed products company.