Here's Why CF Industries (CF) Should Be in Your Portfolio Now
CF Industries Holdings, Inc.’s CF stock looks promising at the moment. We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s take a look into the factors that make this fertilizer company a compelling choice for investors right now.
What’s Working in Favor of CF?
Solid Rank & VGM Score: CF Industries currently has a Zacks Rank #2 (Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
An Outperformer: CF Industries has outperformed the industry it belongs to over a year. The company’s shares have shot up around 59% over this period, compared with roughly 25.6% growth recorded by the industry. Better-than-expected second-quarter performance and upbeat outlook for nitrogen demand and pricing have contributed to the rally in CF Industries’ shares.
Positive Earnings Surprise History: CF Industries has an impressive earnings surprise history. The company has outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering a positive average earnings surprise of roughly 44.6%.
Solid Growth Prospects: The Zacks Consensus Estimate for earnings for third-quarter 2018 for CF Industries is currently pegged at 10 cents, reflecting an expected year-over-year growth of 125.6%. Moreover, earnings are expected to register a whopping 672% growth in 2018.
Upbeat Outlook: CF Industries benefits from higher nitrogen demand driven by healthy corn plantations and cyclical recovery in the nitrogen fertilizer industry. The company expects strong demand in Brazil through the remainder of 2018. It sees a year-over-year increase in urea imports to Brazil during the second half of 2018 partly owing to the expected lost production from the scheduled closure of two Petrobras urea plants in August.
Moreover, CF Industries is poised to benefit from higher prices of nitrogen fertilizers. Higher production costs across Europe and China coupled with reduced production due to the enforcement of environmental regulations in China tightened global nitrogen supply and demand balance and boosted nitrogen prices during first-half 2018. These factors are expected to continue to drive prices in the third quarter. The company also expects demand in Brazil and India to support global nitrogen prices through the balance of 2018.
CF Industries Holdings, Inc. Price and Consensus
CF Industries Holdings, Inc. Price and Consensus | CF Industries Holdings, Inc. Quote
Other Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Celanese Corporation CE, Ingevity Corporation NGVT and Air Products and Chemicals, Inc. APD.
Celanese has an expected long-term earnings growth rate of 10% and a Zacks Rank #1. The company’s shares have gained around 19% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ingevity has an expected long-term earnings growth rate of 12% and a Zacks Rank #1. The company’s shares have rallied around 62% in a year.
Air Products has an expected long-term earnings growth rate of 16.2% and carries a Zacks Rank #2. Its shares have gained roughly 15% over a year.
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