Five Top Stocks For The Long-Term- Stock #3

Hello again! I know you've been waiting with baited breath for the third installment of this series. So far, we have a retailer and a company that lives off of discretionary spending. You must be thinking that these two companies are terrible choices, because the current economy has changed the spending habits of the average American, so that we are no longer a nation of hedonistic whores. This is precisely why these are great companies for the long-term. They've been kicked around pretty badly and when the dust settles from this economic meltdown, slowly but surely, the old spending habits will return to the previous norm.

To all of you who are still non-believers, I shall bestow an energy stock on you, so that you can relax and get on board. Terra Nitrogen (TNH) is the energy stock of the future. This stock is as volatile a mid-cap (middle size company) as I have ever seen, however, despite the craziness going on in the market, it has remained relatively stable. What does this mean? I haven't a clue, because the market is as irrational as ever and nothing makes a bit of sense. Everything nowadays is so uncertain, it is difficult to pick a stock. Remember this, good companies will come out on top in the end.

TNH is an alternative energy company specializing in nitrogen energy products for industrial and agricultural use. By having both sides of the equation covered in terms of clients, this gives the company excellent stability and growth prospects for the future. Since it is an option to oil as a fuel, it poses an excellent position for the long-term, when oil becomes scarce. It is also a wonderful alternative fuel for all of you hippy, tree-huggers out there worrying about the health of the planet.

TNH has traded as low as the mid-$70's and as high as the low-$170's during the past twelve months. It is currently just shy of $120 per share, so you can argue that in terms of valatility it is in the middle of it's price range. The key factors are that this company with a market cap of about $2.5B has no debt and is currently paying a dividend of $11.88 annually, which at the current price is just under a 10% yield. It is a solid company with a future and wonderful balance sheet that pays a dividend equivalent to a junk bond and not near the same amount of risk.

Another attractive aspect of this stock is that it trades at just 8 times earnings, which for an alternative energy company with huge potential for growth is extremely cheap in my opinion. The management is exellent and simply the fact that the company is able to flourish in this market is proof enough it is a strong company. The only possible bump in the road for this company is that it has to make some changes to its plants in order to comply with the Clean Air Act. Luckily, these expenses are relatively low and the competition has to undergo the same changes.

Remember, this stock is volatile and make sure that you do your due diligence and if you do not have tons of money, buy in small increments to lessen the risk. Until next time.....