CF INDUSTRIES HOLDINGS INC (CF) Stock Fundamental Analysis
NYSE:CF - New York Stock Exchange, Inc. - US1252691001 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to CF. CF was compared to 85 industry peers in the Chemicals industry. CF gets an excellent profitability rating and is at the same time showing great financial health properties. CF is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year CF was profitable.
In the past year CF had a positive cash flow from operations.
Each year in the past 5 years CF has been profitable.
Each year in the past 5 years CF had a positive operating cash flow.
1.2 Ratios
CF has a Return On Assets of 10.04%. This is amongst the best in the industry. CF outperforms 95.29% of its industry peers.
The Return On Equity of CF (27.95%) is better than 95.29% of its industry peers.
CF's Return On Invested Capital of 12.60% is amongst the best of the industry. CF outperforms 92.94% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CF is significantly above the industry average of 7.01%.
The 3 year average ROIC (20.79%) for CF is well above the current ROIC(12.60%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.04% | ||
| ROE | 27.95% | ||
| ROIC | 12.6% |
ROA(3y)14.93%
ROA(5y)10.97%
ROE(3y)39.12%
ROE(5y)31.36%
ROIC(3y)20.79%
ROIC(5y)16.71%
1.3 Margins
CF has a Profit Margin of 21.80%. This is amongst the best in the industry. CF outperforms 98.82% of its industry peers.
In the last couple of years the Profit Margin of CF has grown nicely.
CF has a better Operating Margin (30.71%) than 95.29% of its industry peers.
In the last couple of years the Operating Margin of CF has grown nicely.
The Gross Margin of CF (36.20%) is better than 75.29% of its industry peers.
CF's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.71% | ||
| PM (TTM) | 21.8% | ||
| GM | 36.2% |
OM growth 3Y-4.8%
OM growth 5Y7.21%
PM growth 3Y13.52%
PM growth 5Y13.82%
GM growth 3Y-1.74%
GM growth 5Y6.25%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), CF is creating value.
Compared to 1 year ago, CF has less shares outstanding
CF has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, CF has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.53 indicates that CF is not a great score, but indicates only limited risk for bankruptcy at the moment.
CF has a better Altman-Z score (2.53) than 70.59% of its industry peers.
The Debt to FCF ratio of CF is 1.60, which is an excellent value as it means it would take CF, only 1.60 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.60, CF belongs to the top of the industry, outperforming 91.76% of the companies in the same industry.
A Debt/Equity ratio of 0.62 indicates that CF is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.62, CF is in line with its industry, outperforming 52.94% of the companies in the same industry.
Although CF does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 1.6 | ||
| Altman-Z | 2.53 |
ROIC/WACC1.46
WACC8.65%
2.3 Liquidity
CF has a Current Ratio of 2.59. This indicates that CF is financially healthy and has no problem in meeting its short term obligations.
CF's Current ratio of 2.59 is fine compared to the rest of the industry. CF outperforms 77.65% of its industry peers.
CF has a Quick Ratio of 2.22. This indicates that CF is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 2.22, CF belongs to the top of the industry, outperforming 82.35% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.59 | ||
| Quick Ratio | 2.22 |
3. Growth
3.1 Past
CF shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 17.06%, which is quite good.
CF shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 24.81% yearly.
CF shows a small growth in Revenue. In the last year, the Revenue has grown by 0.66%.
The Revenue has been growing slightly by 5.28% on average over the past years.
EPS 1Y (TTM)17.06%
EPS 3Y13.85%
EPS 5Y24.81%
EPS Q2Q%120%
Revenue 1Y (TTM)0.66%
Revenue growth 3Y-3.17%
Revenue growth 5Y5.28%
Sales Q2Q%13.13%
3.2 Future
CF is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 3.30% yearly.
The Revenue is expected to grow by 1.22% on average over the next years.
EPS Next Y6.92%
EPS Next 2Y-1.69%
EPS Next 3Y1.43%
EPS Next 5Y3.3%
Revenue Next Year6.49%
Revenue Next 2Y2.08%
Revenue Next 3Y1.48%
Revenue Next 5Y1.22%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 11.87, which indicates a very decent valuation of CF.
CF's Price/Earnings ratio is a bit cheaper when compared to the industry. CF is cheaper than 80.00% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.60, CF is valued rather cheaply.
The Price/Forward Earnings ratio is 14.37, which indicates a correct valuation of CF.
The rest of the industry has a similar Price/Forward Earnings ratio as CF.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.43, CF is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.87 | ||
| Fwd PE | 14.37 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CF is valued cheaper than 89.41% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CF indicates a rather cheap valuation: CF is cheaper than 90.59% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.87 | ||
| EV/EBITDA | 5.66 |
4.3 Compensation for Growth
CF's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
CF has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.71
PEG (5Y)0.48
EPS Next 2Y-1.69%
EPS Next 3Y1.43%
5. Dividend
5.1 Amount
CF has a Yearly Dividend Yield of 2.32%.
CF's Dividend Yield is a higher than the industry average which is at 3.70.
CF's Dividend Yield is comparable with the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.32% |
5.2 History
The dividend of CF is nicely growing with an annual growth rate of 10.99%!
CF has paid a dividend for at least 10 years, which is a reliable track record.
CF has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)10.99%
Div Incr Years3
Div Non Decr Years19
5.3 Sustainability
26.42% of the earnings are spent on dividend by CF. This is a low number and sustainable payout ratio.
CF's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP26.42%
EPS Next 2Y-1.69%
EPS Next 3Y1.43%
87.92
+0.33 (+0.38%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners96.99%
Inst Owner Change1.41%
Ins Owners0.69%
Ins Owner Change1.39%
Market Cap14.64B
Analysts71.03
Price Target90.14 (2.53%)
Short Float %5.17%
Short Ratio3.06
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.32% |
Yearly Dividend2.03
Dividend Growth(5Y)10.99%
DP26.42%
Div Incr Years3
Div Non Decr Years19
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)20.9%
Min EPS beat(2)13.26%
Max EPS beat(2)28.54%
EPS beat(4)4
Avg EPS beat(4)18.36%
Min EPS beat(4)9.97%
Max EPS beat(4)28.54%
EPS beat(8)6
Avg EPS beat(8)6.6%
EPS beat(12)7
Avg EPS beat(12)2.37%
EPS beat(16)7
Avg EPS beat(16)-12.57%
Revenue beat(2)1
Avg Revenue beat(2)2.05%
Min Revenue beat(2)-1.42%
Max Revenue beat(2)5.52%
Revenue beat(4)2
Avg Revenue beat(4)1.62%
Min Revenue beat(4)-1.42%
Max Revenue beat(4)5.52%
Revenue beat(8)3
Avg Revenue beat(8)-0.34%
Revenue beat(12)4
Avg Revenue beat(12)-1.43%
Revenue beat(16)5
Avg Revenue beat(16)-1.54%
PT rev (1m)-2.41%
PT rev (3m)-4.79%
EPS NQ rev (1m)7.07%
EPS NQ rev (3m)19.37%
EPS NY rev (1m)12.91%
EPS NY rev (3m)14.2%
Revenue NQ rev (1m)4.3%
Revenue NQ rev (3m)7.79%
Revenue NY rev (1m)2.49%
Revenue NY rev (3m)4.58%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.87 | ||
| Fwd PE | 14.37 | ||
| P/S | 2.39 | ||
| P/FCF | 7.87 | ||
| P/OCF | 6.07 | ||
| P/B | 3.06 | ||
| P/tB | 8.18 | ||
| EV/EBITDA | 5.66 |
EPS(TTM)7.41
EY8.43%
EPS(NY)6.12
Fwd EY6.96%
FCF(TTM)11.17
FCFY12.71%
OCF(TTM)14.49
OCFY16.48%
SpS36.82
BVpS28.71
TBVpS10.75
PEG (NY)1.71
PEG (5Y)0.48
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.04% | ||
| ROE | 27.95% | ||
| ROCE | 15.22% | ||
| ROIC | 12.6% | ||
| ROICexc | 14.21% | ||
| ROICexgc | 19.55% | ||
| OM | 30.71% | ||
| PM (TTM) | 21.8% | ||
| GM | 36.2% | ||
| FCFM | 30.35% |
ROA(3y)14.93%
ROA(5y)10.97%
ROE(3y)39.12%
ROE(5y)31.36%
ROIC(3y)20.79%
ROIC(5y)16.71%
ROICexc(3y)25.05%
ROICexc(5y)19.9%
ROICexgc(3y)32.66%
ROICexgc(5y)25.93%
ROCE(3y)25.11%
ROCE(5y)20.18%
ROICexcg growth 3Y-11.21%
ROICexcg growth 5Y14.8%
ROICexc growth 3Y-12.87%
ROICexc growth 5Y13.25%
OM growth 3Y-4.8%
OM growth 5Y7.21%
PM growth 3Y13.52%
PM growth 5Y13.82%
GM growth 3Y-1.74%
GM growth 5Y6.25%
F-Score7
Asset Turnover0.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 1.6 | ||
| Debt/EBITDA | 1.07 | ||
| Cap/Depr | 61.81% | ||
| Cap/Sales | 9.01% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 86.92% | ||
| Profit Quality | 139.22% | ||
| Current Ratio | 2.59 | ||
| Quick Ratio | 2.22 | ||
| Altman-Z | 2.53 |
F-Score7
WACC8.65%
ROIC/WACC1.46
Cap/Depr(3y)55.57%
Cap/Depr(5y)51.85%
Cap/Sales(3y)6.77%
Cap/Sales(5y)7.13%
Profit Quality(3y)131.22%
Profit Quality(5y)188.35%
High Growth Momentum
Growth
EPS 1Y (TTM)17.06%
EPS 3Y13.85%
EPS 5Y24.81%
EPS Q2Q%120%
EPS Next Y6.92%
EPS Next 2Y-1.69%
EPS Next 3Y1.43%
EPS Next 5Y3.3%
Revenue 1Y (TTM)0.66%
Revenue growth 3Y-3.17%
Revenue growth 5Y5.28%
Sales Q2Q%13.13%
Revenue Next Year6.49%
Revenue Next 2Y2.08%
Revenue Next 3Y1.48%
Revenue Next 5Y1.22%
EBIT growth 1Y8.54%
EBIT growth 3Y-7.81%
EBIT growth 5Y12.87%
EBIT Next Year34.4%
EBIT Next 3Y9.3%
EBIT Next 5Y9.21%
FCF growth 1Y-36.99%
FCF growth 3Y-9.42%
FCF growth 5Y9.75%
OCF growth 1Y-29.29%
OCF growth 3Y-7.54%
OCF growth 5Y8.58%