Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A- . The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
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Highlights from the ratings report include:
- The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 3.14, which clearly demonstrates the ability to cover short-term cash needs.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Chemicals industry and the overall market, CF INDUSTRIES HOLDINGS INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- The gross profit margin for CF INDUSTRIES HOLDINGS INC is rather high; currently it is at 66.80%. It has increased significantly from the same period last year. Along with this, the net profit margin of 34.90% significantly outperformed against the industry average.
- Net operating cash flow has significantly increased by 77.56% to $445.50 million when compared to the same quarter last year. In addition, CF INDUSTRIES HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of 0.84%.
- CF INDUSTRIES HOLDINGS INC has improved earnings per share by 37.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CF INDUSTRIES HOLDINGS INC increased its bottom line by earning $22.05 versus $4.90 in the prior year. This year, the market expects an improvement in earnings ($27.07 versus $22.05).
CF Industries Holdings, Inc., through its subsidiary, CF Industries, Inc., manufactures and distributes nitrogen and phosphate fertilizer products, serving agricultural and industrial customers worldwide. It operates in two segments, Nitrogen and Phosphate. The company has a P/E ratio of 7.9, equal to the average chemicals industry P/E ratio and below the S&P 500 P/E ratio of 17.7. CF has a market cap of $12.97 billion and is part of the
industry. Shares are up 42.6% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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