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 solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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Highlights from the ratings report include:
- Powered by its strong earnings growth of 34.24% and other important driving factors, this stock has surged by 44.19% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CF should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- CF INDUSTRIES HOLDINGS INC has improved earnings per share by 34.2% 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 ($27.50 versus $22.05).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 21.9% when compared to the same quarter one year prior, going from $330.90 million to $403.30 million.
- CF's debt-to-equity ratio is very low at 0.29 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CF has a quick ratio of 2.15, which demonstrates the ability of the company to cover short-term liquidity needs.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. 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.
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. CF has a market cap of $13.18 billion and is part of the basic materials sector and chemicals industry. The company has a P/E ratio of 7.6, below the S&P 500 P/E ratio of 17.7. Shares are up 44.6% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
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