Contrasting CF Industries (NYSE:CF) and Olin (NYSE:OLN)

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

Volatility & Risk

Olin has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500. Comparatively, CF Industries has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500.

Earnings & Valuation

This table compares Olin and CF Industries”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Olin	$6.78 billion	0.29	-$100.50 million	($1.47)	-11.77
CF Industries	$7.08 billion	2.55	$1.46 billion	$14.17	8.43

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Olin and CF Industries, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Olin	3	12	1	0	1.88
CF Industries	3	12	6	1	2.23

Olin presently has a consensus target price of $20.64, indicating a potential upside of 19.27%. CF Industries has a consensus target price of $122.65, indicating a potential upside of 2.72%. Given Olin’s higher possible upside, analysts plainly believe Olin is more favorable than CF Industries.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Olin	-2.49%	-6.63%	-1.58%
CF Industries	27.12%	24.41%	13.74%

Dividends

Olin pays an annual dividend of $0.80 per share and has a dividend yield of 4.6%. CF Industries pays an annual dividend of $2.40 per share and has a dividend yield of 2.0%. Olin pays out -54.4% of its earnings in the form of a dividend. CF Industries pays out 16.9% 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 raised its dividend for 3 consecutive years. Olin is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

88.7% of Olin shares are held by institutional investors. Comparatively, 93.1% of CF Industries shares are held by institutional investors. 1.6% of Olin shares are held by company insiders. Comparatively, 0.5% of CF Industries shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

CF Industries beats Olin on 13 of the 18 factors compared between the two stocks.

About Olin

Olin Corporation manufactures and distributes chemical products in the United States, Europe, Asia Pacific, Latin America, and Canada. It operates through three segments: Chlor Alkali Products and Vinyls; Epoxy; and Winchester. The Chlor Alkali Products and Vinyls segment offers chlorine and caustic soda, ethylene dichloride and vinyl chloride monomers, methyl chloride, methylene chloride, chloroform, carbon tetrachloride, perchloroethylene, hydrochloric acid, hydrogen, bleach products, potassium hydroxide, and chlorinated organics intermediates and solvents. The Epoxy segment provides Allylics, such as allyl chloride, epichlorohydrin, and glycerin; aromatics, including acetone, bisphenol, cumene, and phenol; liquid and solid epoxy resins; and converted epoxy resins and additives. The Winchester segment offers sporting ammunition products, including shotshells, small caliber centerfire, and rimfire ammunition products for hunters and recreational shooters, and law enforcement agencies; small caliber military ammunition products for use in infantry and mounted weapons; and industrial products comprising gauge loads and powder-actuated tool loads for maintenance applications in power and concrete industries, and powder-actuated tools in construction industry. The company markets its products through its sales force, as well as directly to various industrial customers, mass merchants, retailers, wholesalers, gun clubs, other distributors, and the U.S. Government and its prime contractors. Olin Corporation was incorporated in 1892 and is based in Clayton, Missouri.

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.