Terra Nitrogen Company, L.P. (TNH)

Mad Money - Cramer Pick

high yield

Automom likes terra - max score 66% (income)

Long time pick on the WSB20. Their could be earnings pressure within the industry for a while, but I will not hesitate to purchase more nitrate around $99.

wallstreetbean.com

Strong Balance sheet and a fat dividend to boot. Plus they provide key ingredients in making fertilizer and I doubt we will ever stop needing that.

This is a safe place with a good yield to park your money while the markets correct.

Terra Nitrogen is a debt free provider of fertilizer. Found this pick at an interesting website called wallstreetbean.com. The company is selling for less than 10 times historical earnings and its current dividend yield is above 8%. Farmers are trying to limit fertilizer purchases in the near term, but the longterm need for fertilizer is undeniable.

I have seen this come up on too many growth and value screens to ignore it. TNH is in a basic, essential industry (Nitrogen fertilizer is essential for plant growth, soils are largely depleted and are not getting any better.) It has appeared on Portfolio123's Graham screen which has outperformed the market massively (500%+) since the early 2000s. ROE is greater than 20 for a 5-year average with a 8.5% dividend, a P/E under 10 and no debt.

Natural gas will rise but with that rise will come higher commodity costs so they will be able to charge more, offsetting the increased cost.

Mmm...nitrogen...

Very low P/E. Great prospects.

No debt, very nice margins and dividend. People need to eat.

Agri business ..... fertilizer producer .... people need to eat

This limited partnership has just suffered a big correction in price and is now a steal considering its excellent yield.

GREAT DIVIDEND, STRONG PERFORMANCE OVERALL

Maslow's heirarchy of needs: Regardless of what else people want/desire, they need air, water, and food at the very least...and will do whatever it takes to get it.

Recovery or now, we have a growing population and a lot of hungry people. Fertilizer is a good bet.

Terra Nitrogen Company, L.P. (TNH)
$110.12 -5.93 (-5.11%)
6/8/2009 1:24 PM
The Company is a producer of nitrogen products and methanol. It also produces anhydrous ammonia, ammonium nitrate and nitrogen solutions in the United Kingdom.
Caps 3*, 323/27 all stars
P/E Ratio 9.31
Div. (Yield) 8.40 (7.20%)
Daily Range $108.50 - $116.06
Volume 103,682
52-Wk Range $65.20 - $153.49
Avg. Daily Vol. 56,000
Beta (3 year) 0.85
Share Related Items
Mkt Cap (Mil) 2,147.11
Shares Out (Mil) 18.50
Float (Mil) 18.50
Dividend Information
Yield % 7.20
Annual Dividend 8.40
Payout Ratio 109.00
Financial Strength
Quick Ratio 1.70
Current Ratio 2.20
LT Debt/ Equity 0.00
Total Debt / Equity 0.00
Valuation Ratios
Price Earnings 9.30
Price/Sales 2.40
Price/Book 10.87
Price/Cash Flow 5.30
Per Share Data
Earnings 12.46
Sales 48.32
Book Value 10.68
Cash Flow 21.84
Short Interest
Current Month (Mil) 0.14
Previous Month (Mil) 0.20
Short Interest Ratio (Days) 2.90
Management Effectiveness
Return on Equity 194.00
Return on Assets 127.40
Return on Investments 194.00
Profitability
Gross Margin 46.80
EBIT Margin 43.00
Profit Margin 43.00

FINANCIAL RATIOS

Company Industry
Valuation Ratios
P/E Ratio (TTM) 9.30 14.60
P/E High - Last 5 Yrs 14.10 59.00
P/E Low - Last 5 Yrs 2.00 7.50
Beta 0.90 0.83
Price to Sales (TTM) 2.40 2.31
Price to Book (MRQ) 10.87 4.09
Price to Tangible Book (MRQ) 10.87 6.32
Price to Cash Flow (TTM) 5.30 10.80
Price to Free Cash Flow (TTM) -19.30 -137.70
Dividends
Dividend Yield (%) 7.20 1.10
Dividend Yield - 5 Yr Avg (%) 10.00 0.90
Dividend 5 Yr Growth Rate (%) 90.45 33.93
Payout Ratio (TTM) 109.00 14.00
Sales (MRQ) vs Qtr 1 Yr Ago (%) -5.30 -7.80
Sales (TTM) vs TTM 1 Yr Ago (%) 42.10 47.20
Growth Rates (%)
Sales - 5 Yr Growth Rate (%) 15.55 6.14
EPS (MRQ) vs Qtr 1 Yr Ago (%) -46.90 -34.10
EPS (TTM) vs TTM 1 Yr Ago (%) -46.90 -34.10
EPS - 5 Yr Growth Rate (%) 85.65 19.61
Capital Spending - 5 Yr Growth Rate (%) 26.18 36.61
Financial Strength
Quick Ratio (MRQ) 1.70 1.10
Current Ratio (MRQ) 2.20 2.00
LT Debt to Equity (MRQ) 0.00 0.35
Total Debt to Equity (MRQ) 0.00 0.40
Interest Coverage (TTM) 1,175.00 21.10
Profitability Ratios (%)
Gross Margin (TTM) 46.80 45.00
Gross Margin - 5 Yr Avg 31.90 37.30
EBITD Margin (TTM) 44.80 28.30
EBITD - 5 Yr Avg 20.84 0.00
Pre-Tax Margin (TTM) 43.00 23.50
Pre-Tax Margin - 5 Yr Avg 27.40 14.00
Management Effectiveness (%)
Net Profit Margin (TTM) 0.43 0.18
Net Profit Margin - 5 Yr Avg 27.40 9.90
Return on Assets (TTM) 127.40 15.20
Return on Assets - 5 Yr Avg 56.30 8.40
Return on Investment (TTM) 194.00 23.30
Return on Investment - 5 Yr Avg 90.80 13.80
Efficiency
Revenue/Employee (TTM) 5,484,325.00 845,065.00
Net Income/Employee (TTM) 2,356,632.00 149,358.00
Receivable Turnover (TTM) 28.60 7.60
Inventory Turnover (TTM) 12.40 3.50
Asset Turnover (TTM) 2.50 1.00
(Wow amazing numbers, especiall 5 yr EPS growth, & employee efficiency. Also pitches by
DemonDoug 10/10/08  "No debt. Pays solid dividend. Virtually zero chance of going bankrupt. Supplies needed products in the real (as opposed the fake paper) economy. Will definitely survive the downturn, and will be positioned well for future growth, and I'm singling out TNH because of the first item I mention on this pitch: NO DEBT. "
Love to pick this up in the $90's)

my pick - for large dividend; can't last too long

FERTILIZER WITH A 10% DIV

I may be chasing but stock looks to go higher.