CVR Partners, (NYSE: UAN) and Terra Nitrogen Company, L.P. (NYSE:TNH) are both small-cap basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, dividends, valuation, analyst recommendations, institutional ownership, risk and profitability.
Earnings and Valuation
This table compares CVR Partners, and Terra Nitrogen Company, L.P.’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|CVR Partners,||$346.61 million||0.96||$91.00 million||($0.37)||-7.92|
|Terra Nitrogen Company, L.P.||$398.10 million||3.72||$196.10 million||$6.47||12.26|
Terra Nitrogen Company, L.P. has higher revenue and earnings than CVR Partners,. CVR Partners, is trading at a lower price-to-earnings ratio than Terra Nitrogen Company, L.P., indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
22.3% of CVR Partners, shares are held by institutional investors. Comparatively, 3.4% of Terra Nitrogen Company, L.P. shares are held by institutional investors. 2.0% of Terra Nitrogen Company, L.P. shares are held 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.
CVR Partners, pays an annual dividend of $0.08 per share and has a dividend yield of 2.7%. Terra Nitrogen Company, L.P. pays an annual dividend of $6.40 per share and has a dividend yield of 8.1%. CVR Partners, pays out -21.6% of its earnings in the form of a dividend. Terra Nitrogen Company, L.P. pays out 98.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This is a breakdown of current recommendations for CVR Partners, and Terra Nitrogen Company, L.P., as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Terra Nitrogen Company, L.P.||0||0||0||0||N/A|
CVR Partners, currently has a consensus price target of $5.50, suggesting a potential upside of 87.71%. Given CVR Partners,’s higher possible upside, research analysts clearly believe CVR Partners, is more favorable than Terra Nitrogen Company, L.P..
Volatility & Risk
CVR Partners, has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500. Comparatively, Terra Nitrogen Company, L.P. has a beta of 0.06, indicating that its share price is 94% less volatile than the S&P 500.
This table compares CVR Partners, and Terra Nitrogen Company, L.P.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Terra Nitrogen Company, L.P.||38.78%||43.15%||39.71%|
Terra Nitrogen Company, L.P. beats CVR Partners, on 9 of the 14 factors compared between the two stocks.
About CVR Partners,
CVR Partners, LP is a limited partnership formed by CVR Energy, Inc. (CVR Energy) to own, operate and grow its nitrogen fertilizer business. The Company produces and distributes nitrogen fertilizer products, which are used by farmers to manage the yield and quality of their crops. As of December 31, 2016, the Company produced its nitrogen fertilizer products at two manufacturing facilities, located in Coffeyville, Kansas and East Dubuque, Illinois. As of December 31, 2016, the Company’s Coffeyville Facility included a 1,300 ton-per-day capacity ammonia unit, a 3,000 ton-per-day capacity urea-ammonium nitrate (UAN) unit, and a gasifier complex having a capacity of 89 million standard cubic feet per day of hydrogen. The gasifier is a dual-train facility, with each gasifier able to function independently of the other. The Coffeyville Facility utilizes a petroleum coke, or pet coke, gasification process to produce nitrogen fertilizer.
About Terra Nitrogen Company, L.P.
Terra Nitrogen Company, L.P. (TNCLP) is a limited partnership that produces nitrogen fertilizer products. The Company’s principal products are anhydrous ammonia (ammonia) and urea ammonium nitrate solutions (UAN), which it manufactures at its facility in Verdigris, Oklahoma. Its nitrogen products are used primarily by farmers. For the year ended December 31, 2016, it had sold 2.2 million tons of nitrogen fertilizers. The Company has production facility, in Verdigris, Oklahoma. As of December 31, 2016, it had two ammonia plants, two nitric acid plants and two UAN plants. The Company conducts its operations through an operating partnership, Terra Nitrogen, Limited Partnership (TNLP). Terra Nitrogen GP Inc. is the general partner of both TNCLP and TNLP and owns a 0.025% general partner interest in each of TNCLP and TNLP. The General Partner is an indirect subsidiary of CF Industries Holdings, Inc., which is engaged in the manufacturing and distribution of nitrogen products.
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