Investopedia: Yara Built To Last, But Looking At A Downturn In The Cycle

Norway's Yara International (Nasdaq:YARIY) is no run-of-the-mill commodity company. Not only is the largest supplier of mineral fertilizers in the world, holding 9% share of the global nitrogen fertilizers market, but Yara has a rare record of consistent double-digit returns on capital and assets.

While the quality of the company's assets, the benefits of nitrogen fertilizers, and the discipline of management speak well to the company's future, a surge in Chinese exports and energy costs is squeezing the company's profitability. Making matters worse, it's likely to get uglier from here, as the company could be looking at EBITDA bottoming out in the 2014/2015 timeframe. Although Yara is a little undervalued today and is likely to continuing paying a healthy dividend through the lows of the cycle, holding commodity stocks through the bottom of the cycle can be painful for shareholders.

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