Contrasting CF Industries (NYSE:CF) & Novozymes A/S (OTCMKTS:NVZMY)

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

Institutional and Insider Ownership

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

Profitability

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

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

Volatility & Risk

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for CF Industries and Novozymes A/S, as reported by MarketBeat.

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

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

Dividends

CF Industries pays an annual dividend of $2.40 per share and has a dividend yield of 1.9%. Novozymes A/S pays an annual dividend of $0.39 per share and has a dividend yield of 0.6%. CF Industries pays out 17.8% of its earnings in the form of a dividend. Novozymes A/S pays out 24.7% 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.

Earnings and Valuation

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

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

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.

Summary

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

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.

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.