The commodity market is getting all the attention nowadays, with oil and gas prices soaring. But agriculture is one of the strongest performing sectors in 2022, being an essential resource, like oil. Seeing as food is critical for life on earth, investors are now asking, what are the best fertilizer stocks to buy?

Fertilizer requires three vital nutrients, among others, including:

• Potash
• Potassium
• Phosphorus

As farmers use the land, it depletes the natural nutrients, which are replaceable with fertilizer. Even before the war in Ukraine, crop nutrient prices were soaring, more than doubling from 2020.

With Russia being a major producer of these nutrients, the war is squeezing the market further. In fact, Russia produces 13% of the total global fertilizer output.

Therefore, the war threatens the global food market as companies rush to look for alternatives. If you ask yourself, what are the best fertilizer stocks to buy to take advantage of the shift, keep reading to find out.

What Are the Best Fertilizer Stocks to Buy Right Now

Although the fertilizer industry is cyclical, the companies below are market leaders that continue expanding their position. Not only that, but skyrocketing demand and a limited supply boost revenues, leading to higher free cash flow (FCF) and income. That said, the extra cash is often given to shareholders via dividends and stock buybacks.

With this in mind, the VanEck Agribusiness ETF (NYSE: MOO) is up 3% this year, while the S&P 500 (NYSE: SPY) is down over 12%.

As the war in Ukraine further crunches the crop nutrient supply chain, agriculture companies look to benefit from rising commodity prices. For this reason, what are the best fertilizer stocks to buy to take advantage of the transition? Here are the top five.

No. 5 Intrepid Potash (NYSE: IPI)

• Market Cap: 937M
• YTD Return: 76%
• 1 YR Revenue Growth: 65%

As a leading producer of muriate of potash (MOP) or potassium chloride in the U.S., Intrepid plays a critical role in the fertilizer industry. MOP is the most common potash in fertilizer for many types of crops.

The company also produces Trio (Potassium, Magnesium and Sulfur) while providing oil companies high-quality water and other services.

Furthermore, the company has a strong balance sheet with growing cash. New oil investment activity and rising nutrient prices are driving sales significantly higher in every segment. For example, potash sales increased by 41% in Q4, while Trio rose 58% and oil solutions 57%.

Looking ahead, as nations look elsewhere for fertilizer and oil solutions, IPI is looking to continue the momentum. To learn about the top oil companies as tension rises in Ukraine, read more on the best oil stocks during war.

Keep reading to discover what are the best fertilizer stocks to buy right now.

No. 4 Bunge Ltd. (NYSE: BG)

• Market Cap: 15B
• YTD Return: 15%
• 1 YR Revenue Growth: 32%

If you are looking for a diversified agribusiness, then Bunge Ltd is worth looking into. The company is no stranger to the food industry with over 200 years of experience.

The Netherlands-based company is a leading oilseed and grain producer while providing industry supporting products. Although fertilizer only makes up a small part of the company’s overall sales, Bunge supplies critical nutrients like ammonia, urea and potassium.

Lastly, Bunge has a long history of rewarding shareholders with dividends (1.91% yield) despite volatile conditions.

No. 3 Nutrien Ltd. (NYSE: NTR)

• Market Cap: 67B
• YTD Return: 29%
• 1 YR Revenue Growth: 84%

Nutrien is one of the largest crop nutrient suppliers, with customers in every major growing region. Based in Canada, the firm produces over 59 billion lbs. of potash, nitrogen, and phosphate each year, with more available.

Furthermore, Nutrien’s low-cost mines and rising commodity prices are driving record financial results. In Q4, the company generated $1.2 billion in net earnings or $2.11 per share.

Most important, the company does not expect demand to slow with rising demand and tight supply this year. On top of this, Canadian stocks are outperforming, with the iShares MSCI Canada ETF (NYSE: EWC) up 3% in the past three months compared to the S&P 500 down 10%.

Keep reading to discover what are the best fertilizer stocks to buy right now.

No. 2 CF Industries (NYSE: CF)

• Market Cap: 19B
• YTD Return: 34%
• 1 YR Revenue Growth: 130%

CF Industries primarily focuses on nitrogen’s after selling its phosphate business in 2014. In fact, CF is the global leader in ammonia production, an essential nutrient for crops to grow.

The company has an impressive track record of positive cash flow to reduce debt, pay dividends, and buy stock. Moreover, CF is positioning itself as a global leader in clean hydrogen supply, which is expecting to grow steadily (14% CAGR) over the next few years.

With this in mind, ESG stocks (Environmental, Social & Governance) generally see higher investor appreciation over the years.

No. 1 Mosaic Company (NYSE: MOS)

• Market Cap: 21B
• YTD Return: 43%
• 1 YR Revenue Growth: 56%

Mosaic is the leading producer of potash (along with Nutrien) and Phosphate, two of the most critical crop nutrients. In November, I wrote about the top agriculture stocks to invest in as food inflation just started heating up, with Mosaic coming in number 3.

When I was writing the article, you could grab shares of MOS for around $37. Now, after running up over 75% and touching over $64 per share, MOS is pulling back. At this time, MOS is down 7%, with several leaders pulling back.

Not only that, but the value of Mosaic’s products is increasing significantly. Potash, the company’s largest segment by revenue, is worth double the amount it was in 2021. Then, Phosphate prices are up at least another 38% in the same time.

With this in mind, Mosaic’s top-line growth is accelerating with double-digit growth in the past five quarters.

And lastly, after complaining to the U.S. International Trade Commission (ITC) of unfair trade practices from Russia, the ITC placed taxes on incoming phosphate imports. Going forward, Mosaic will continue seeing higher demand for its products while funneling extra cash flow to investors.

Wondering What Are the Best Fertilizer Stocks to Buy? What to Know

If you haven’t noticed it yet, the price of popular food items like eggs and bread is soaring as inflation hits crops. Although a few factors are pushing food prices higher, a tight fertilizer market is a leading factor.

High demand for crop nutrients and a limited supply boost profit margins and drive higher FCF. As a result, investors see returns through dividends and buybacks.

At the same time, macroeconomic factors are shifting, and stock markets go through cycles. Investors are in a risk-off mode, and crop nutrients are one of the most essential resources if not, the most.

Then again, the war is disrupting global markets with no end in sight. If you are looking to protect your portfolio this year, read more on the best stocks to buy during war.

To answer the question, what are the best fertilizer stocks to buy? These are five of the leading companies in the industry with proven results.