CF Industries Holdings Inc’s Dividend Analysis

Delving Into CF Industries Holdings Inc’s Upcoming Dividend Payout

CF Industries Holdings Inc (CF, Financial) recently announced a dividend of $0.4 per share, payable on 2023-11-30, with the ex-dividend date set for 2023-11-14. As investors look forward to this upcoming payment, the spotlight also shines on the company’s dividend history, yield, and growth rates. Using the data from GuruFocus, let’s look into CF Industries Holdings Inc’s dividend performance and assess its sustainability.

What Does CF Industries Holdings Inc Do?

CF Industries is a leading producer and distributor of nitrogen fertilizers. The company operates seven nitrogen facilities in North America and holds joint venture interests in further production capacity in the United Kingdom and Trinidad and Tobago. CF makes nitrogen primarily using low-cost U.S. natural gas as its feedstock, making CF one of the lowest-cost nitrogen producers globally. The company is also investing in carbon-free blue and green ammonia, which can be used as an alternative fuel to hydrogen or as a means to transport hydrogen.

A Glimpse at CF Industries Holdings Inc’s Dividend History

CF Industries Holdings Inc has maintained a consistent dividend payment record since 2005. Dividends are currently distributed on a quarterly basis.

CF Industries Holdings Inc has increased its dividend each year since 2005. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 18 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.

Breaking Down CF Industries Holdings Inc’s Dividend Yield and Growth

As of today, CF Industries Holdings Inc currently has a 12-month trailing dividend yield of 2.00% and a 12-month forward dividend yield of 2.00%. This suggests an expectation of same dividend payments over the next 12 months.

Over the past three years, CF Industries Holdings Inc’s annual dividend growth rate was 7.70%. Extended to a five-year horizon, this rate decreased to 3.20% per year. And over the past decade, CF Industries Holdings Inc’s annual dividends per share growth rate stands at an impressive 11.80%.

Based on CF Industries Holdings Inc’s dividend yield and five-year growth rate, the 5-year yield on cost of CF Industries Holdings Inc stock as of today is approximately 2.34%.

The Sustainability Question: Payout Ratio and Profitability

To assess the sustainability of the dividend, one needs to evaluate the company’s payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, CF Industries Holdings Inc’s dividend payout ratio is 0.15.

CF Industries Holdings Inc’s profitability rank, offers an understanding of the company’s earnings prowess relative to its peers. GuruFocus ranks CF Industries Holdings Inc’s profitability 9 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported net profit in 9 years out of past 10 years.

Growth Metrics: The Future Outlook

To ensure the sustainability of dividends, a company must have robust growth metrics. CF Industries Holdings Inc’s growth rank of 9 out of 10 suggests that the company’s growth trajectory is good relative to its competitors.

Revenue is the lifeblood of any company, and CF Industries Holdings Inc’s revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. CF Industries Holdings Inc’s revenue has increased by approximately 38.30% per year on average, a rate that outperforms approximately 84.28% of global competitors.

The company’s 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, CF Industries Holdings Inc’s earnings increased by approximately 104.80% per year on average, a rate that outperforms approximately 88.41% of global competitors.

Lastly, the company’s 5-year EBITDA growth rate of 59.20%, which outperforms approximately 90.97% of global competitors.

Next Steps

In conclusion, CF Industries Holdings Inc’s consistent dividend growth, reasonable payout ratio, and strong profitability and growth metrics paint a picture of a company with a stable dividend outlook. The commitment to increasing dividends annually positions CF Industries Holdings Inc as an attractive option for value investors seeking reliable income streams. With the upcoming dividend payment, investors should consider whether CF Industries Holdings Inc aligns with their investment strategy and risk profile. The robust growth indicators also suggest that the company is well-positioned to continue its dividend payments into the future, making it a noteworthy consideration for a dividend-focused portfolio. Will CF Industries Holdings Inc maintain its dividend achiever status, and how will its strategic investments in carbon-free ammonia influence its future profitability? These are critical considerations for investors looking at CF Industries Holdings Inc as a potential addition to their portfolios.

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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.