Unpacking the Upcoming Dividend of CF Industries Holdings Inc
CF Industries Holdings Inc (CF, Financial) recently announced a dividend of $0.5 per share, payable on 2024-02-29, with the ex-dividend date set for 2024-02-14. 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, which is primarily used in fertilizers. The company operates nitrogen manufacturing plants primarily in North America. CF also produces nitrogen in the United Kingdom and holds a joint venture interest in a nitrogen production facility in 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 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 19 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 2.05% and a 12-month forward dividend yield of 2.55%. This suggests an expectation of increased 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 2.40%.
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 the 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 84.96% 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 88.67% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 59.20%, which outperforms approximately 91.5% of global competitors.
Investor Takeaway
In conclusion, CF Industries Holdings Inc's dividend payments, growth rates, and payout ratio, combined with its strong profitability and robust growth metrics, present a compelling case for value investors. As the company continues to navigate the fertile grounds of the fertilizer industry, its commitment to sustainable practices and strategic investments may further solidify its position as a reliable dividend payer. Will CF Industries Holdings Inc continue to be a fixture in the portfolios of dividend-seeking investors? Time and market conditions will tell, but the current indicators are promising.
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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.
