CF Industries Holdings, Inc.’s CF shares have gained 10.8% over the previous three months. The corporate has outperformed its industry’s decline of 4.3% over the identical time-frame. CF has additionally topped the S&P 500’s roughly 2.9% rise over the identical interval.
Let’s have a look into the elements which are driving this main nitrogen fertilizer maker.
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Wholesome Nitrogen Demand, Decrease Gasoline Prices Help CF Inventory
CF Industries is benefiting from the rising international demand for nitrogen fertilizers, which is pushed by vital agricultural demand. Industrial demand for nitrogen has additionally recovered from the pandemic-related disruptions. International demand is anticipated to stay sturdy within the close to future as a result of recovering industrial demand and farmer economics.
Excessive ranges of corn planted acres and low nitrogen channel inventories are anticipated to drive demand for nitrogen in North America. Demand for urea can be more likely to stay sturdy in Brazil and India. Demand in India is anticipated to be pushed by an uptick in home manufacturing on the again of upper working charges and favorable climate situations.
CF, on its second-quarter name, stated that it anticipates the worldwide supply-demand steadiness to stay optimistic over the close to time period, pushed by nitrogen import necessities for Brazil and India till the tip of the yr, in addition to sustained vast power spreads between North America and high-cost manufacturing in Europe.
CF additionally stands to learn from decrease pure gasoline costs. It noticed a decline in pure gasoline prices within the second quarter of 2024. The common value of pure gasoline fell to $1.90 per MMBtu within the quarter from $2.75 per MMBtu within the year-ago quarter. Decrease pure gasoline prices led to a decline within the firm’s value of gross sales. The advantages of diminished gasoline prices are anticipated to proceed within the third quarter.
CF Industries Stays Centered on Capital Allocation
CF stays dedicated to boosting shareholders’ worth by leveraging sturdy money flows. The corporate repurchased 8.3 million shares for $652 million within the first half of 2024, together with 4 million shares for $305 million within the second quarter.
The present $3 billion share repurchase program had round $1.9 billion remaining on the finish of the second quarter. CF returned $832 million via dividends and share repurchases throughout first-half 2024. Earlier this yr, the corporate additionally introduced a 25% enhance in quarterly dividend to 50 cents per share.
CF affords a dividend yield of two.5% (above the S&P 500′s common dividend yield of roughly 2%) on the present inventory worth. Its payout ratio is 35% (a ratio under 60% is an efficient indicator that the dividend might be sustainable) with a five-year annualized dividend progress price of 11.6%. Backed by sturdy monetary well being, the corporate’s dividend is perceived to be protected and dependable.
CF Industries Holdings, Inc. Inventory Value and Consensus
CF Industries Holdings, Inc. price-consensus-chart | CF Industries Holdings, Inc. Quote
CF’s Zacks Rank & Different Key Picks
CF at the moment carries a Zacks Rank #3 (Maintain).
Higher-ranked shares within the Fundamental Supplies house are IAMGOLD Company IAG, Eldorado Gold Company EGO and Hawkins, Inc. HWKN. Whereas IAMGOLD and Eldorado Gold sport a Zacks Rank #1 (Sturdy Purchase), Hawkins carries a Zacks Rank #2 (Purchase). You’ll be able to see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for IAMGOLD’s current-year earnings has elevated by 46.4% up to now 60 days. IAG beat the consensus estimate in every of the final 4 quarters with the common shock being 200%. Its shares have shot up roughly 119% up to now yr.
The consensus estimate for Eldorado Gold’s present yr earnings is pegged at $1.35 per share, indicating a year-over-year rise of 136.8%. EGO beat the consensus estimate in every of the final 4 quarters, with the common earnings shock being 430.3%. The corporate’s shares have rallied roughly 74% up to now yr.
The Zacks Consensus Estimate for Hawkins’ present fiscal-year earnings is pegged at $4.14, indicating an increase of 15.3% from year-ago ranges. The Zacks Consensus Estimate for HWKN’s present fiscal-year earnings has elevated 12.8% up to now 60 days. The inventory has rallied round 100% up to now yr.
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CF Industries Holdings, Inc. (CF) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the writer and don’t essentially replicate these of Nasdaq, Inc.
