Contrasting H. B. Fuller (NYSE:FUL) & CF Industries (NYSE:CF)

CF Industries (NYSE:CF) and H. B. Fuller (NYSE:FUL) are both materials companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Profitability

This table compares CF Industries and H. B. Fuller’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%
H. B. Fuller	5.29%	12.18%	4.73%

Analyst Ratings

This is a breakdown of recent ratings and price targets for CF Industries and H. B. Fuller, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CF Industries	4	11	5	2	2.23
H. B. Fuller	0	2	3	2	3.00

CF Industries presently has a consensus price target of $116.47, suggesting a potential downside of 8.84%. H. B. Fuller has a consensus price target of $67.86, suggesting a potential upside of 37.55%. Given H. B. Fuller’s stronger consensus rating and higher possible upside, analysts clearly believe H. B. Fuller is more favorable than CF Industries.

Volatility & Risk

CF Industries has a beta of 0.4, meaning that its stock price is 60% less volatile than the S&P 500. Comparatively, H. B. Fuller has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500.

Valuation & Earnings

This table compares CF Industries and H. B. Fuller”s gross 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	2.73	$1.46 billion	$13.49	9.47
H. B. Fuller	$3.47 billion	0.76	$151.97 million	$3.26	15.13

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

Institutional & Insider Ownership

93.1% of CF Industries shares are owned by institutional investors. Comparatively, 95.9% of H. B. Fuller shares are owned by institutional investors. 0.5% of CF Industries shares are owned by insiders. Comparatively, 1.8% of H. B. Fuller shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

CF Industries pays an annual dividend of $2.40 per share and has a dividend yield of 1.9%. H. B. Fuller pays an annual dividend of $0.98 per share and has a dividend yield of 2.0%. CF Industries pays out 17.8% of its earnings in the form of a dividend. H. B. Fuller pays out 30.1% 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 and H. B. Fuller has increased its dividend for 57 consecutive years. H. B. Fuller is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

CF Industries beats H. B. Fuller on 9 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 H. B. Fuller

H.B. Fuller Company, together with its subsidiaries, formulates, manufactures, and markets adhesives, sealants, coatings, polymers, tapes, encapsulants, additives, and other specialty chemical products. It operates through three segments: Hygiene, Health and Consumable Adhesives; Engineering Adhesives; and Construction Adhesives. The Hygiene, Health and Consumable Adhesives segment produces and supplies specialty industrial adhesives, such as thermoplastic, thermoset, reactive, water-based, and solvent-based products for applications in various markets, including packaging, converting, nonwoven and hygiene, and health and beauty. The Engineering Adhesives segment produces and supplies high performance industrial adhesives comprising reactive, light cure, two-part liquids, polyurethane, silicone, film, and fast cure products to the durable assembly, performance wood and textile, transportation, electronics, clean energy, aerospace and defense, appliance, heavy machinery, and insulating glass markets. The Construction Adhesives segment provides products used for tile setting, commercial roofing, heating, ventilation, and air conditioning and insulation applications, as well as caulks and sealants for the consumer market and professional trade. The company sells its products directly to customers, as well as through distributors and retailers in the Americas, Europe, India, the Middle East, Africa, and the Asia Pacific. H.B. Fuller Company was founded in 1887 and is headquartered in Saint Paul, Minnesota.