For Fertilizer Makers, Drought Means Opportunity (MOS, POT, CF)

In its fiscal fourth-quarter report Tuesday, Mosaic

said it expects to see continued strong demand in fiscal 2013, boosted by increased demand from farmers at home and aboard. At the same time, the worst drought in 56 years is now threatening crops across much of the United States. Mosaic pointed out in its report the growing evidence of nutrient deficiencies in the soil throughout of the farm belt. That double threat will be a bane for farmers and food producers, and eventually consumers. But it could very well turn out to be a boon for fertilizer makers like Mosaic, and their investors. Mosaic posted earnings per share and revenue for the quarter that were lower than in the same period of last year. However, both the top and bottom lines exceed the Thomson Reuters consensus estimates. The Minnesota-based producer of phosphate- and potash-based crop nutrients for the agriculture industry worldwide has a market capitalization of more than $22 billion. It announced it would be doubling the dividend yield to more than 1.5 percent. The operating margin is higher than the industry average, and the return on equity is more than 18 percent. The stock has outperformed Market Vectors Agribusiness ETF

but underperformed the S&P 500 over the past six months. Mosaic shares closed up X% Tuesday to XX. Canadian competitor Potash Corp. of Saskatchewan

is scheduled to post second-quarter results July 26, and analysts are looking for modest growth on the top and bottom lines. The market cap of this producer of fertilizers and feed products is more than $36 billion and the dividend yield is about 1.3%. Its long-term EPS growth forecast is more than 12 percent, and the return on equity is a healthy 36.5%. The share price is more than 16% higher than a month ago. But over the past six months, the stock has underperformed competitors Mosaic and Monsanto

. Potash shares ended at $X, or up X% on the day. The share price of Intrepid Potash

is also more than 16 percent higher than a month ago. The company posted declining earnings but higher revenue in its first-quarter report in May. This fertilizer maker is headquartered in Denver and sports a market cap of less than $2 billion. There is no dividend here, but the long-term EPS growth forecast is about 45 percent, and the operating margin is higher than the industry average. The price-to-earnings (P/E) ratio is higher than the industry average, but forecast to decline. Over the past six months, the stock has underperformed competitors Mosaic and Agrium

. Intrepid shares closed up X% Tuesday to end the day at XX. Illinois-based CF Industries

reached a new multiyear high of $205.11 on Tuesday. Analysts expect EPS to be more than 20 percent higher year over year when the company reports second-quarter results in August, and the consensus estimate has risen 42 cents in the past 60 days. This nitrogen and phosphate fertilizer producer is an S&P 500 component with a market cap of around $13 billion. It has a dividend yield of less than 1 percent. The P/E ratio is less than 9 and the return on equity is almost 35 percent. The share price is more than 36 percent higher year to date, as well as up more than 21 percent in the past month. On Tuesday, the stock rose about X percent, or $X, during the trading session. The Market Vectors Agribusiness ETF includes Mosaic, CF Industries, Monsanto and Toronto-traded shares of Potash and Agrium among its top holdings. The share price is more than 5 percent higher than a month ago, and ended Tuesday's trading session up X percent to $X.