CF Industries (NYSE:CF) and Novozymes A/S (OTCMKTS:NVZMY) Critical Comparison

Novozymes A/S (OTCMKTS:NVZMY) and CF Industries (NYSE:CF) are both large-cap materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, risk, dividends, institutional ownership and profitability.

Earnings and Valuation

This table compares Novozymes A/S and CF Industries”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Novozymes A/S	$4.70 billion	5.82	$660.28 million	$1.58	41.78
CF Industries	$7.08 billion	2.63	$1.46 billion	$13.49	9.12

CF Industries has higher revenue and earnings than Novozymes A/S. CF Industries is trading at a lower price-to-earnings ratio than Novozymes A/S, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings for Novozymes A/S and CF Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Novozymes A/S	0	1	0	2	3.33
CF Industries	4	11	5	2	2.23

CF Industries has a consensus price target of $116.47, suggesting a potential downside of 5.37%. Given CF Industries’ higher probable upside, analysts clearly believe CF Industries is more favorable than Novozymes A/S.

Dividends

Novozymes A/S pays an annual dividend of $0.39 per share and has a dividend yield of 0.6%. CF Industries pays an annual dividend of $2.40 per share and has a dividend yield of 1.9%. Novozymes A/S pays out 24.7% of its earnings in the form of a dividend. CF Industries pays out 17.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. CF Industries has increased its dividend for 3 consecutive years. CF Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Novozymes A/S has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500. Comparatively, CF Industries has a beta of 0.4, meaning that its stock price is 60% less volatile than the S&P 500.

Institutional and Insider Ownership

0.0% of Novozymes A/S shares are held by institutional investors. Comparatively, 93.1% of CF Industries shares are held by institutional investors. 0.5% of CF Industries shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Novozymes A/S and CF Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Novozymes A/S	14.70%	6.60%	4.36%
CF Industries	27.12%	24.41%	13.74%

Summary

CF Industries beats Novozymes A/S on 13 of the 17 factors compared between the two stocks.

About Novozymes A/S

Novozymes A/S produces and sells industrial enzymes, microorganisms, and probiotics in Denmark, rest of Europe, North America, Asia Pacific, the Middle East, Africa, Latin America, and internationally. The company offers protein solutions for the food and beverage industry. It also offers industrial hygiene, drain openers, hard surface, medical cleaning, septic tanks, ware washing, and professional laundry services. In addition, the company provides dishwashing, softener, microbial and medical cleaning services. Further, it provides corn, cotton, forages, peanuts, pulses, soybeans, wheat, small grains, bioyield, and biocontrol solutions; warm water species, recirculating aquaculture system; animal health and nutrition solutions; fiber modification, bleach boosting, deposit control, and starch modification solutions. Additionally, the company provides carbon capture, leather and textiles solutions; enzyme solutions, including corn and wheat separation, liquefaction, saccharification, filtration, isomerization, maltose, and specialties solutions; warm water species and recirculating aquaculture system solutions; human health solutions, comprising brain, oral, protective and immune, and gastrointestinal health solutions; ethanol, biodiesel, renewable diesel, education, wastewater, and sewage sludge, and renewable diesel solutions; agriculture and industry, biogas food waste, food waste, biocatalysis, cell culture, diagnostics, enzyme, and biogas solutions. Furthermore, it provides lipases, proteases, oxidoreductases, and carbohydrases. Novozymes A/S was founded in 1925 and is based in Bagsvaerd, Denmark.

About CF Industries

CF Industries Holdings, Inc., together with its subsidiaries, engages in the manufacture and sale of hydrogen and nitrogen products for energy, fertilizer, emissions abatement, and other industrial activities in North America, Europe, and internationally. It operates through Ammonia, Granular Urea, UAN, AN, and Other segments. The company's principal products include anhydrous ammonia, granular urea, urea ammonium nitrate, and ammonium nitrate products. It also offers diesel exhaust fluid, urea liquor, nitric acid, and aqua ammonia products. The company primarily serves cooperatives, independent fertilizer distributors, traders, wholesalers, and industrial users. CF Industries Holdings, Inc. was founded in 1946 and is headquartered in Northbrook, Illinois.