Terra Nitrogen Company, L.P. (NYSE: TNH) and Lsb Industries (NYSE:LXU) are both small-cap basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitability.

Institutional and Insider Ownership

4.8% of Terra Nitrogen Company, L.P. shares are owned by institutional investors. Comparatively, 68.8% of Lsb Industries shares are owned by institutional investors. 2.0% of Terra Nitrogen Company, L.P. shares are owned by insiders. Comparatively, 18.2% of Lsb Industries shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Terra Nitrogen Company, L.P. has a beta of 0.05, meaning that its share price is 95% less volatile than the S&P 500. Comparatively, Lsb Industries has a beta of 4.54, meaning that its share price is 354% more volatile than the S&P 500.

Profitability

This table compares Terra Nitrogen Company, L.P. and Lsb Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Terra Nitrogen Company, L.P. 38.78% 43.15% 39.71%
Lsb Industries 24.04% -1.11% -0.42%

Earnings & Valuation

This table compares Terra Nitrogen Company, L.P. and Lsb Industries’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Terra Nitrogen Company, L.P. $398.10 million 3.63 $196.10 million $6.47 11.97
Lsb Industries $411.83 million 0.43 $14.20 million $2.07 3.04

Terra Nitrogen Company, L.P. has higher revenue, but lower earnings than Lsb Industries. Lsb Industries is trading at a lower price-to-earnings ratio than Terra Nitrogen Company, L.P., indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings for Terra Nitrogen Company, L.P. and Lsb Industries, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Terra Nitrogen Company, L.P. 0 0 0 0 N/A
Lsb Industries 0 0 0 0 N/A

Dividends

Terra Nitrogen Company, L.P. pays an annual dividend of $6.40 per share and has a dividend yield of 8.3%. Lsb Industries does not pay a dividend. Terra Nitrogen Company, L.P. pays out 98.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Terra Nitrogen Company, L.P. beats Lsb Industries on 7 of the 12 factors compared between the two stocks.

About Terra Nitrogen Company, L.P.

Terra Nitrogen Company, L.P. (TNCLP) is a limited partnership that produces nitrogen fertilizer products. The Company’s principal products are anhydrous ammonia (ammonia) and urea ammonium nitrate solutions (UAN), which it manufactures at its facility in Verdigris, Oklahoma. Its nitrogen products are used primarily by farmers. For the year ended December 31, 2016, it had sold 2.2 million tons of nitrogen fertilizers. The Company has production facility, in Verdigris, Oklahoma. As of December 31, 2016, it had two ammonia plants, two nitric acid plants and two UAN plants. The Company conducts its operations through an operating partnership, Terra Nitrogen, Limited Partnership (TNLP). Terra Nitrogen GP Inc. is the general partner of both TNCLP and TNLP and owns a 0.025% general partner interest in each of TNCLP and TNLP. The General Partner is an indirect subsidiary of CF Industries Holdings, Inc., which is engaged in the manufacturing and distribution of nitrogen products.

About Lsb Industries

LSB Industries, Inc. is a holding company. The Company, through its subsidiaries, is engaged in the manufacture and sale of chemical products. The Company operates through chemical business segment. It is a manufacturer and distributor of nitrogen fertilizer and other nitrogen products in North America. Its principal nitrogen products are ammonia (AN), fertilizer grade ammonium nitrate (high density ammonium nitrate prills used in the agricultural industry (HDAN)), urea ammonia nitrate (UAN), and AN solution for agricultural applications, high purity and commercial grade ammonia, high purity AN, sulfuric acids, concentrated, blended and regular nitric acid, mixed nitrating acids, carbon dioxide, and diesel exhaust fluid for industrial applications, and industrial grade AN (low density ammonium nitrate prills used in the mining industry (LDAN)) and 83% AN solution (AN solution) for the mining industry. Its customers include cooperatives and independent fertilizer distributors.

Receive News & Stock Ratings for Terra Nitrogen Company L.P. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Terra Nitrogen Company L.P. and related stocks with our FREE daily email newsletter.