Portfolio Sweetener

Oil is not the only commodity surging ahead these days. Thanks to government-subsidized ethanol production and growing global food demand, corn has been transformed into one of the hottest commodities on the market.

Indeed the price of corn has risen more than 75% in the last 12 months to $6 per bushel. No surprise then that Corn Products International (nyse: CPO - news - people ), one of the world's largest corn refiners, is firing on all cylinders. CPO makes sweeteners and starches including glucose, high fructose corn syrup, sorbitol and dextrose, which is found in everything from IV drips to McDonald's french fries and Gatorade.

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Westchester, Ill.-based CPO was spun off from CPC International in 1997 and now provides products to more than 60 industries around the world. In 2007, it had $3.4 billion in sales and $198 million in net income, up 60% from the prior year.

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"March quarter earnings per share surged 29% to $0.85, beating the consensus by $0.14," notes Richard Moroney, editor of the small- and mid-cap focused newsletter Upside. "Revenue jumped 22%, paced by a 36% increase in South America. Management raised profit guidance for 2008, reflecting solid industry fundamentals, particularly in South America. Per-share earnings should range from $2.90 to $3.15, vs. prior guidance of $2.65 to $2.85. Revenue should approach $4 billion."

Thanks to opportunistic commodity hedging and its ability to pass on most raw material costs (corn accounts for 40% to 60% of its costs) the company has been logging record profits. Its NYSE-listed shares are up 25% year to date.

Moroney thinks CPO is a long-term winner and has rated its stock a best buy. Moroney especially likes its recent quarterly dividend hike by 17% to $0.14 per share, payable July 25. Moroney notes in a recent hotline to subscribers that CPO's dividend increase is its second this year, and he's impressed by future growth prospects.

"Looking ahead, higher refining volumes in fast-growing international markets, expansion into new regions and an improved product mix should bolster results."