Thursday, October 13, 2011

Questions America Wants Answered: Terra Nitrogen Or CVR Partners: What's The Better Fertilizer Investment? (TNH; UAN)

 Yesterday TNH closed at $156.15, UAN at $23.30.
From Seeking Alpha:
Here is our special report comparing two very popular fertilizer investments: Terra Nitrogen (TNH), formerly a subsidiary of Terra Industries but now controlled by CF Industries, and the recent upstart, CVR Partners, (UAN), which is controlled by CVR Energy. Terra Nitrogen Company, L.P. and CVR Partners, L.P. are both Master Limited Partnerships listed on the NYSE and are often considered interchangeable by income-oriented investors looking for dividend yield and capital appreciation leveraged to agriculture and crop prices.

Both TNH and CVR produce nitrogen fertilizers, own just one plant complex each and both are on the Verdegris River within 60 miles of each other, across Lake Oologah. The river meanders across the eastern part of Kansas and Oklahoma. CVR is located in the town of Coffeyville, Kansas. TNH is located near the river Port of Catoosa outside of Tulsa, Oklahoma. Both plants make A.A. (Anhydrous Ammonia) and UAN (Urea Ammonium Nitrate Solution) for mainly agricultural but also industrial applications. But that’s where the similarity ends. In terms of history, technology, size, financial structure, and investment attributes, these two MLPs have quite surprising differences....MUCH MORE