Analyzing CF Industries (NYSE:CF) and Ashland (NYSE:ASH)

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

Analyst Ratings

This is a breakdown of recent recommendations for Ashland and CF Industries, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ashland	0	5	7	0	2.58
CF Industries	3	12	6	2	2.30

Ashland presently has a consensus target price of $74.10, indicating a potential downside of 0.31%. CF Industries has a consensus target price of $121.94, indicating a potential upside of 3.28%. Given CF Industries’ higher possible upside, analysts clearly believe CF Industries is more favorable than Ashland.

Insider & Institutional Ownership

94.0% of Ashland shares are owned by institutional investors. Comparatively, 93.1% of CF Industries shares are owned by institutional investors. 1.3% of Ashland shares are owned by company insiders. Comparatively, 0.5% of CF Industries shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Ashland has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500. Comparatively, CF Industries has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ashland	2.82%	8.03%	3.31%
CF Industries	27.12%	24.41%	13.74%

Dividends

Ashland pays an annual dividend of $1.68 per share and has a dividend yield of 2.3%. CF Industries pays an annual dividend of $2.40 per share and has a dividend yield of 2.0%. Ashland pays out 147.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. CF Industries pays out 17.8% of its earnings in the form of a dividend. Ashland has increased its dividend for 16 consecutive years and CF Industries has increased its dividend for 3 consecutive years. Ashland is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Ashland and CF Industries”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ashland	$1.82 billion	1.87	-$845.00 million	$1.14	65.20
CF Industries	$7.08 billion	2.52	$1.46 billion	$13.49	8.75

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

Summary

CF Industries beats Ashland on 11 of the 18 factors compared between the two stocks.

About Ashland

Ashland Inc. provides additives and specialty ingredients in the North and Latin America, Europe, Asia Pacific, and internationally. It operates through Life Sciences, Personal Care, Specialty Additives, and Intermediates segments. The Life Sciences segment offers pharmaceutical solutions, including controlled release polymers, disintegrants, tablet coatings, thickeners, solubilizers, and tablet binders; nutrition solutions, such as thickeners, stabilizers, emulsifiers, and additives; and nutraceutical solutions comprising products for weight management, joint comfort, stomach and intestinal health, sports nutrition, and general wellness, as well as custom formulation, toll processing, and particle engineering solutions. Its Personal Care segment provides a range of nature-based, biodegradable, and performance ingredients; solutions for toothpastes, mouth washes and rinses, denture cleaning, and care for teeth; and household supplies nature-derived rheology ingredients, biodegradable surface wetting agents, performance encapsulates, and specialty polymers. The Specialty Additives segment offers rheology modifiers, foam control agents, surfactants and wetting agents, pH neutralizers, advanced ceramics used in catalytic converters, environmental filters, ingredients for the manufacturing of ceramic capacitors, plasma display panels and solar cells, ingredients for textile printing, thermoplastic metals, and alloys for welding. Its Intermediates segment produces 1,4 butanediol and related derivatives, including n-methylpyrrolidone. It offers its products to customers in a range of consumer and industrial markets, such as architectural coatings, construction, energy, food and beverage, nutraceuticals, personal care, and pharmaceutical. The company was formerly known as Ashland Global Holdings Inc. and changed its name to Ashland Inc. in August 2022. Ashland Inc. was founded in 1924 and is headquartered in Wilmington, Delaware.

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.