Supply chain constraints and rising food and energy prices have driven the demand for fertilizers. With rising prices of fertilizers and crop nutrients, economies are taking active steps to reduce exports and focus on domestic needs. Therefore, Nutrien (NYSE:NTR) and CF Industries (CF) are expected to benefit from the robust market demand. But which of these stocks is a better buy now? Read more to find out.Nutrien Ltd. (NTR) and CF Industries Holdings, Inc. (NYSE:CF) are two prominent players in the global agricultural inputs industry. NTR is a Canada-based provider of crop inputs and services, operating through four segments — Retail Ag Solutions; Potash; Nitrogen; and Phosphate. It distributes crop nutrients, crop protection products, seeds, and merchandise products through approximately 2,000 retail locations. On the other hand, CF manufactures and sells hydrogen and nitrogen products for clean energy, fertilizer, emissions reduction, and other industrial applications. The company primarily serves cooperatives, independent fertilizer distributors, traders, wholesalers, and industrial users.
High inflation and supply chain constraints have made food, energy, and commodity prices surge lately. Moreover, the rising consumer spending this festive season has been driving the demand for fertilizers and crop nutrients to get better crop quality and yield. However, rising natural gas prices (a key ingredient in making nitrogen-based fertilizers) have affected crop nutrient production. As fertilizer prices and supply shortages are expected to continue in 2022 and some countries have stopped exporting their crop nutrients to support their domestic availability, companies are expected to deliver better returns in the coming months. The global fertilizer market is expected to grow at a 5% CAGR and reach $323.38 million by 2028. So, both NTR and CF should benefit.
While NTR gained 37% in price over the past year, CF has surged 55.3%. CF is a clear winner with 30.3% gains versus NTR’s 10.4% in terms of their past three months’ performance. But which of these stocks is a better pick right now? Let us find out.