The Andersons (NASDAQ: ANDE) and CVR Partners (NYSE:UAN) are both small-cap basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, analyst recommendations, profitability, institutional ownership and valuation.
Earnings and Valuation
This table compares The Andersons and CVR Partners’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|The Andersons||$3.69 billion||0.25||$42.51 million||$1.46||22.23|
|CVR Partners||$330.80 million||1.16||-$72.78 million||($0.64)||-5.28|
This is a breakdown of current ratings and target prices for The Andersons and CVR Partners, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
The Andersons presently has a consensus target price of $34.50, indicating a potential upside of 6.32%. CVR Partners has a consensus target price of $5.00, indicating a potential upside of 47.93%. Given CVR Partners’ stronger consensus rating and higher possible upside, analysts clearly believe CVR Partners is more favorable than The Andersons.
The Andersons pays an annual dividend of $0.66 per share and has a dividend yield of 2.0%. CVR Partners pays an annual dividend of $0.02 per share and has a dividend yield of 0.6%. The Andersons pays out 45.2% of its earnings in the form of a dividend. CVR Partners pays out -3.1% 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. CVR Partners has increased its dividend for 3 consecutive years.
Volatility & Risk
The Andersons has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500. Comparatively, CVR Partners has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500.
This table compares The Andersons and CVR Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider & Institutional Ownership
78.5% of The Andersons shares are held by institutional investors. Comparatively, 31.0% of CVR Partners shares are held by institutional investors. 6.3% of The Andersons shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
The Andersons beats CVR Partners on 10 of the 17 factors compared between the two stocks.
About The Andersons
The Andersons, Inc., an agriculture company, operates in the grain, ethanol, plant nutrient, and rail sectors in the United States and internationally. The company's Grain segment operates grain elevators; stores grains; and provides grain marketing, risk management, and corn origination services to its customers and affiliated ethanol facilities. Its Ethanol segment purchases and sells ethanol; and offers facility operations, risk management, and ethanol and corn oil marketing services to the ethanol plants it invests in and operates. The company's Rail segment leases, sells, and repairs various types of railcars, locomotives, and barges; provides fleet management services to private railcar owners; and offers metal fabrication services. Its Plant Nutrient segment manufactures, distributes, and retails agricultural and related plant nutrients, corncob-based products, and pelleted lime and gypsum products; and crop nutrients, crop protection chemicals, and seed products, as well as provides application and agronomic services to commercial and family farmers. This segment also offers warehousing, packaging, and manufacturing services to nutrient producers and other distributors; and manufactures and distributes nitrogen reagents for air pollution control systems that are used in coal-fired power plants, and water treatment and dust abatement products. In addition, this segment produces professional turf care products for golf course and turf care markets; and fertilizer and control products, as well as provides contract manufacturing of fertilizer and control products. The Andersons, Inc. was founded in 1947 and is based in Maumee, Ohio.
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.
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