Critical Survey: Nissan Chemical (OTCMKTS:NNCHY) & CF Industries (NYSE:CF)

Nissan Chemical (OTCMKTS:NNCHY) and CF Industries (NYSE:CF) are both materials companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, institutional ownership, profitability and earnings.

Dividends

Nissan Chemical pays an annual dividend of $1.16 per share and has a dividend yield of 2.0%. CF Industries pays an annual dividend of $2.40 per share and has a dividend yield of 2.1%. Nissan Chemical pays out 45.3% 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.

Profitability

This table compares Nissan Chemical and CF Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nissan Chemical	18.19%	20.93%	15.22%
CF Industries	27.12%	24.41%	13.74%

Insider & Institutional Ownership

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

Earnings and Valuation

This table compares Nissan Chemical and CF Industries”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nissan Chemical	$1.86 billion	4.16	$328.07 million	$2.56	22.38
CF Industries	$7.08 billion	2.45	$1.46 billion	$13.49	8.49

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

Volatility & Risk

Nissan Chemical has a beta of 0.02, meaning that its stock price is 98% 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.

Analyst Ratings

This is a breakdown of current recommendations for Nissan Chemical and CF Industries, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nissan Chemical	0	1	0	0	2.00
CF Industries	4	11	6	2	2.26

CF Industries has a consensus target price of $119.00, indicating a potential upside of 3.86%. Given CF Industries’ stronger consensus rating and higher probable upside, analysts plainly believe CF Industries is more favorable than Nissan Chemical.

Summary

CF Industries beats Nissan Chemical on 15 of the 18 factors compared between the two stocks.

About Nissan Chemical

Nissan Chemical Corporation engages in the chemicals, performance materials, agricultural chemicals, and pharmaceuticals businesses in Japan and internationally. The company provides high purity chemicals; AdBlue, an urea solution; ammonia, sulfuric, and nitric acid, as well as concrete and civil engineering-related products; TEPIC, an epoxy compound; Melamine Cyanurate, a salt of melamine and iso cyanuric acid; TEPIC-VL, a liquid epoxy compound; TEPIC-FL, a liquid epoxy material; FOLDI-E101, an epoxy reactive diluent; Ecopromote, a nucleating agents for PLA; Nissan Reishi, a health food; phenylphosphonic acid; HI-LITE, a chlorinated isocyanulate; OPTBEADS, a melamine-formaldehyde resin and silica; and FINEOXOCOL, a saturated fatty alcohol and acid. It also offers performance materials comprising display, semiconductor, and inorganic materials; agricultural chemicals, such as herbicides, insecticides, fungicides, etc. for use on agricultural land, as well as in golf courses and parks; and drug substances for antiparasite drugs for animals. In addition, the company provides pharmaceutical products, such as LIVALO, a antihypercholesterolemic agent; LANDEL and FINTE, a long-acting calcium channel blocker; APIs and intermediaries; and manufacturing and process researching services for pharmaceutical ingredients. Further, it develops healthcare, information and communication materials, and environmental and energy materials. The company was formerly known as Nissan Chemical Industries, Ltd. and changed its name to Nissan Chemical Corporation in July 2018. Nissan Chemical Corporation was founded in 1887 and is headquartered in Tokyo, Japan.

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.