10 Dividend Stocks With Low Payout Ratios and Strong Upside Potential

6. The Mosaic Company (NYSE:MOS)

Upside Potential as of June 24: 25.67%

5-Year Average Payout Ratio: 53.7%

On June 17, Freedom Broker double upgraded The Mosaic Company (NYSE:MOS) to Buy from Sell. It raised a stock’s price target to $32 from $24. The analyst said sulfur costs surged and phosphate gross margins came under pressure following the closure of the Strait of Hormuz, but that trend should reverse after the signing of the U.S.-Iran agreement. In a research note, the firm said it expects normalizing sulfur supply to drive a recovery in Mosaic’s margins and support a return to the stock’s pre-closure valuation levels.

On May 21, BMO Capital lowered its price recommendation on MOS to $31 from $35. It reiterated an Outperform rating on the shares. The analyst said near-term sentiment around the stock remains mixed because of volatility in sulfur and phosphate stripping margins. Even so, the firm views Mosaic as trading at a relatively low point in investor sentiment and believes patient investors are likely to be rewarded.

The Mosaic Company (NYSE:MOS) produces and markets concentrated phosphate and potash crop nutrients. Its business operates through the Phosphates, Potash, and Mosaic Fertilizantes segments.

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