Critical Review: Intrepid Potash (NYSE:IPI) and Knife River (NYSE:KNF)

Intrepid Potash (NYSE:IPI) and Knife River (NYSE:KNF) are both basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.

Profitability

This table compares Intrepid Potash and Knife River’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Intrepid Potash	8.37%	4.57%	4.13%
Knife River	N/A	N/A	N/A

Earnings & Valuation

This table compares Intrepid Potash and Knife River’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Intrepid Potash	$309.38 million	1.05	$72.22 million	$1.95	12.64
Knife River	$2.53 billion	1.18	$116.22 million	N/A	N/A

Knife River has higher revenue and earnings than Intrepid Potash.

Insider & Institutional Ownership

49.1% of Intrepid Potash shares are held by institutional investors. Comparatively, 67.1% of Knife River shares are held by institutional investors. 18.2% of Intrepid Potash shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Intrepid Potash and Knife River, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Intrepid Potash	1	1	0	0	1.50
Knife River	0	0	2	0	3.00

Intrepid Potash presently has a consensus price target of $27.00, suggesting a potential upside of 9.58%. Knife River has a consensus price target of $61.50, suggesting a potential upside of 16.70%. Given Knife River’s stronger consensus rating and higher probable upside, analysts clearly believe Knife River is more favorable than Intrepid Potash.

Summary

Knife River beats Intrepid Potash on 7 of the 11 factors compared between the two stocks.

About Intrepid Potash

Intrepid Potash, Inc., together with its subsidiaries, engages in the extraction and production of the potash in the United States and internationally. It operates through three segments: Potash, Trio, and Oilfield Solutions. The company offers muriate of potash for various markets, such as agricultural market as a fertilizer input; the industrial market as a component in drilling and fracturing fluids for oil and gas wells, as well as an input to other industrial processes; and the animal feed market as a nutrient supplement. It also provides Trio, a specialty fertilizer that delivers potassium, sulfate, and magnesium in a single particle; water for oil and gas services industry; salt for various markets, including animal feed, industrial applications, pool salt, and the treatment of roads and walkways for ice melting or to manage road conditions; magnesium chloride for use as a road treatment agent for deicing and dedusting; brines for use in oil and gas industry to support well workover and completion activities; and metal recovery salts. Intrepid Potash, Inc. was founded in 2000 and is based in Denver, Colorado.

About Knife River

Knife River Corporation provides aggregates-based construction materials and contracting services in the United States. It operates through six segments: Pacific, Northwest, Mountain, North Central, South, and Energy Services. It mines, processes, and sells construction aggregates, including crushed stone and sand, and gravel; and produces and sells asphalt and ready-mix concrete, as well as provides contracting services to support the aggregate-based product lines, including heavy-civil construction, asphalt and concrete paving, and site development and grading. It serves various projects related to highways, airports, and other public infrastructure. The company was founded in 1917 and is based in Bismarck, North Dakota.