5-Star Stocks Poised to Pop: Terra Nitrogen

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, nitrogen products producer Terra Nitrogen Company (NYS: TNH) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Terra Nitrogen's business and see what CAPS investors are saying about the stock right now.

Terra Nitrogen facts

Headquarters (Founded)Deerfield, Ill. (1991)
Market Cap$2.93 billion
IndustryAgricultural chemicals
Trailing-12-Month Revenue$741 million
ManagementChairman/CEO Dr. Stephen Wilson
Vice President Douglas Barnard
Return on Capital (Average, Past 3 Years)88.9%
Cash/Debt$144 million / $0
Dividend Yield10.1%

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 96.5% of the 1,300 members who have rated Terra Nitrogen believe the stock will outperform the S&P 500 going forward. These bulls include indotrekker and americanbuffalo.

Earlier this month, indotrekker tapped the stock as a timely income opportunity: "[Terra Nitrogen's] high-yield dividends, market niche and huge profit margins will set it up as a hedge for many cautious investors in this precarious market."

Currently, Terra Nitrogen even sports a cheapish P/E of 6.6. That represents a clear discount to industry peers like Monsanto (NYS: MON) (23.7), PotashCorp (NYS: POT) (12.1), and Syngenta (NYS: SYT) (17.0).

CAPS member americanbuffalo expands on Terra as a great way to play defense:

I'm adding this fertilizer company to my picks based on my assumption that we are on the cusp of a nasty bear market. This is a high yield, low beta stock in an industry tied to food production -- just the ticket to ride out a bear market. Terra Nitrogen performed very well in the last bear cycle (2008) and may provide some protection over the next few months.

What do you think about Terra Nitrogen, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Want to see how well (or not so well) the stocks in this series are performing? Follow the newTrackPoisedToCAPS account.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Syngenta, as well as creating a synthetic long position in Monsanto. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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