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• RNF 100% Rate It

New issueRentech Nitrogen Partners ( RNF ) is producing big profit growth, a plus for a stock that pays a solid dividend.

The company makes nitrogen fertilizers and industrial products such as ammonia and urea.

Rentech's production facility is in the heart of the Corn Belt, the largest market in the U.S. for nitrogen fertilizer products.

The company's earnings bolted 162% in 2011 and it's off to a fast start in 2012. Last month, Rentech delivered a 467% surge in its Q1. That followed gains of 100%, 60% and 145% in previous quarters.

Revenue grew 31%, marking the second straight period of accelerating growth. Higher selling prices and favorable weather in the Mid Corn Belt (an area that spans Illinois, Indiana Iowa, Missouri, Nebraska and Ohio) helped results.

Analysts polled by Thomson Reuters see earnings sprouting 160% for the year.

On Monday, Dahlman Rose upgraded the agricultural chemicals industry to attractive from cautious, citing a smaller corn corp due to bad weather. A drought is affecting the Midwest, sending corn prices surging. Dahlman raised Rentech to buy from hold.

Rentech is a master limited partnership, or MLP. This type of structure provides tax benefits and income to investors. An MLP avoids double taxation: It pays no income taxes at the corporate level. Only cash payouts are taxed, from shareholders.

Unlike stocks, MLPs trade in units rather than shares. So its investors are called unitholders, not shareholders.

While similar to dividends, MLPs return cash to unitholders through distributions. These are usually paid on a quarterly basis.

In May, Rentech paid a first-quarter distribution of $1.06 a unit. The amounts paid each quarter will vary. At a quarterly rate of $1.06 a unit, Rentech has a yield of about 15%. But the company has said that it expects a distribution of about $2.86 a unit for 2012.

Rentech shot out from a first-stage base in January and climbed as much as 46% before consolidating again. It has corrected about 31% and it's building the right side of a new base.

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