Terra Nitrogen Company, L.P. (NYSE: TNH) and Rentech Nitrogen Partners (NYSE:RNF) are both basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.
Valuation and Earnings
This table compares Terra Nitrogen Company, L.P. and Rentech Nitrogen Partners’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Terra Nitrogen Company, L.P.||$398.10 million||3.69||$196.10 million||$6.47||12.17|
|Rentech Nitrogen Partners||N/A||N/A||N/A||N/A||N/A|
Terra Nitrogen Company, L.P. has higher revenue and earnings than Rentech Nitrogen Partners.
This table compares Terra Nitrogen Company, L.P. and Rentech Nitrogen Partners’ 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%|
|Rentech Nitrogen Partners||-24.24%||N/A||-28.26%|
Terra Nitrogen Company, L.P. pays an annual dividend of $6.40 per share and has a dividend yield of 8.1%. Rentech Nitrogen Partners does not pay 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. Terra Nitrogen Company, L.P. has increased its dividend for 2 consecutive years.
This is a breakdown of recent ratings and recommmendations for Terra Nitrogen Company, L.P. and Rentech Nitrogen Partners, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Terra Nitrogen Company, L.P.||0||0||0||0||N/A|
|Rentech Nitrogen Partners||0||0||0||0||N/A|
Insider and Institutional Ownership
3.4% of Terra Nitrogen Company, L.P. shares are owned by institutional investors. 2.0% of Terra Nitrogen Company, L.P. shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Terra Nitrogen Company, L.P. beats Rentech Nitrogen Partners on 8 of the 9 factors compared between the two stocks.
Terra Nitrogen Company, L.P. Company Profile
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.
Rentech Nitrogen Partners Company Profile
East Dubuque Nitrogen Partners, L.P., formerly Rentech Nitrogen Partners, L.P., is a master limited partnership that owns and operates a fertilizer business. The Company operates through two business segments: East Dubuque and Pasadena. The Company owns and operates the East Dubuque Facility and its Pasadena Facility. The East Dubuque Facility produces ammonia, urea ammonium nitrate (UAN), liquid and granular urea, nitric acid and food-grade carbon dioxide, using natural gas as its primary feedstock. The East Dubuque Facility is located on approximately 210 acres in the northwest corner of Illinois on a 140-foot bluff above the Upper Mississippi River. The Pasadena Facility produces synthetic ammonium sulfate and ammonium sulfate. The Pasadena Facility also produces sulfuric acid and ammonium thiosulfate. The Pasadena Facility’s products are applied to various crops, including soybeans, potatoes, cotton, canola, alfalfa, corn and wheat.
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