No. 5: Potash Corporation of SaskatchewanThis is a Canada-based integrated fertilizer and feed company. The company reported a 60% year-over-year jump in earnings to $402 million. Higher profitability is an indication of strong demand for potash and nitrogen products. Revenue from operations surged 43% during the quarter. "Rapidly rising prices for a number of key crop commodities pushed our industry past the inflection point, as demonstrated by stronger demand and the beginning of pricing momentum for all nutrients, including potash later in the quarter," said Bill Doyle, president and CEO of Potash, in a press release, Gross margins jumped from 31.4% in September 2009 to 35.8% in the last quarter. The potash segment delivered nearly two-thirds of quarterly gross margin. The first phase of the expansion of the company's Cory SK facility was also completed. The stock has been among the best performers in the sector, churning out gains of 35% during the last year. The stock is trading with a forward P/E of 5 to 6.
No. 4. AgriumThis is a wholesale and retail player in agriculture commodities. The company caters to the U.S as well as South American markets such as Chile, Argentina and Uruguay. Net income more than doubled to $57 million during the third quarter of 2010, compared with last year. Net sales rose 9% during the same period. "While EBITDA from our retail operations this quarter was almost double last year's level and wholesale's rose by more than 60%, we expect the improvements in the crop input markets to become even more evident in the fourth quarter of 2010," said Mike Wilson, Agrium's president and CEO, in a press release. "Furthermore, we anticipate the strength in crop input demand and prices to continue into the spring of 2011, benefiting all three of our strategic business units." The company's fourth-quarter guidance for earnings per share was $1.00 to $1.30. The company recently acquired Australian-based grain marketer and seller AWB. The stock is trading with a forward P/E of 12 to 13.
No. 3: DeereDeere is a U.S.-based company with business interests in segments like agriculture and turf, construction, forestry and credit. During the fourth quarter, net income increased to $457 million, compared with a net loss of $223 million during the same period last year. Net sales zoomed 35% to $7.2 billion. The equipment operations segment posted a net sales increase of 39% during the quarter. Management sounded positive on the strong prospects for U.S. farm production, compared with European production. "Although conditions continued to be positive in the U.S. farm sector, and included a highly favorable sales mix of larger equipment, European agricultural markets remained soft," said Deere's chairman and CEO, Samuel R. Allen, in a press release, Allen announced a new combine harvester factory and a joint-venture production facility for construction equipment, both in India. The company intends to sell its wind energy business. The stock delivered returns of 41% during the last year and is trading with a forward P/E of 6 to 7.