CF Industries Holdings, Inc. (CF) stock analysis

P/E below its 5-year median

CF Industries's P/E of 8.7 is below its own 5-year median of 10.9.

P/E below the industry

CF Industries's P/E of 8.7 is below the Chemicals and Allied Products median of 25.2.

EV/EBITDA below its 5-year median

CF Industries's EV/EBITDA of 5.8 is below its 5-year median of 6.4.

P/B above the industry

CF Industries's price-to-book of 3.25 is above the Chemicals and Allied Products median of 2.25.

Trading below fair value

The share price of $123.24 is below our fair value estimate of $243.91.

Margin of safety over 20%

The price is 49.5% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -14.1% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -18.2% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing faster than the industry

Revenue grew 17.9% over the last twelve months; the Chemicals and Allied Products median is 3.5%.

Guidance raised

CF Industries raised its full year 2026 capital expenditures outlook on May 6, 2026.

Gross margin improving

Gross margin was 42.5% over the last twelve months, against 36.9% a year earlier.

Return on equity

Needs positive equity and five years of results.

Return on capital over 10%

Return on invested capital was 37.6%, above the 10% that usually covers the cost of capital.

Return on equity against the industry

Needs positive equity.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin against its history

Needs five years of revenue and net income.

Net margin against the industry

Needs revenue and net income.

High debt

Debt is 56.1% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 136% five years ago to 56.1%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 95.8% of total debt.

Interest well covered

Operating income covers interest expense 11.1 times.

Short-term assets cover short-term debts

Current assets are 2.98 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.38; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

CF Industries paid dividends worth 1.7% of the share price over the last twelve months.

Yield below Treasuries

The 1.7% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; CF Industries yields 1.7%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Earnings cover

Needs dividends paid and net income.

Covered by free cash flow

Dividends take 15.6% of free cash flow.