CVR Partners (NYSE: UAN) and The Andersons (NASDAQ:ANDE) 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 institutional ownership, dividends, earnings, risk, valuation, profitability and analyst recommendations.
Institutional and Insider Ownership
31.0% of CVR Partners shares are held by institutional investors. Comparatively, 77.7% of The Andersons shares are held by institutional investors. 5.5% of The Andersons shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Risk and Volatility
CVR Partners has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500. Comparatively, The Andersons has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500.
This table compares CVR Partners and The Andersons’ net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
Earnings & Valuation
This table compares CVR Partners and The Andersons’ top-line revenue, earnings per share and valuation.
||Earnings Per Share
The Andersons has higher revenue and earnings than CVR Partners. CVR Partners is trading at a lower price-to-earnings ratio than The Andersons, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings for CVR Partners and The Andersons, as reported by MarketBeat.
||Strong Buy Ratings
CVR Partners currently has a consensus target price of $5.00, indicating a potential upside of 60.77%. The Andersons has a consensus target price of $34.50, indicating a potential upside of 5.99%. Given CVR Partners’ stronger consensus rating and higher possible upside, equities research analysts clearly believe CVR Partners is more favorable than The Andersons.
CVR Partners pays an annual dividend of $0.02 per share and has a dividend yield of 0.6%. The Andersons pays an annual dividend of $0.66 per share and has a dividend yield of 2.0%. CVR Partners pays out -3.1% of its earnings in the form of a dividend. The Andersons pays out 57.4% 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. The Andersons has raised its dividend for 3 consecutive years. The Andersons is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
The Andersons beats CVR Partners on 11 of the 17 factors compared between the two stocks.
About CVR Partners
CVR Partners LP is a holding company, which engages in the nitrogen fertilizer business. Its products include ammonia and urea ammonium nitrate fertilizers. The company was founded on June 1, 2007 and is headquartered in Sugar Land, TX.
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.
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