Terra Nitrogen Company, L.P. (NYSE: TNH) and Rentech Nitrogen Partners (NYSE:RNF) are both basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, institutional ownership, dividends, profitability, analyst recommendations, earnings and valuation.

Analyst Recommendations

This is a breakdown of current ratings for Terra Nitrogen Company, L.P. and Rentech Nitrogen Partners, as provided by MarketBeat.

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

Earnings and Valuation

This table compares Terra Nitrogen Company, L.P. and Rentech Nitrogen Partners’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Terra Nitrogen Company, L.P. $398.10 million 3.68 $196.10 million $6.47 12.13
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.

Profitability

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%

Dividends

Terra Nitrogen Company, L.P. pays an annual dividend of $6.40 per share and has a dividend yield of 8.2%. 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 raised its dividend for 2 consecutive years.

Institutional & Insider Ownership

3.4% of Terra Nitrogen Company, L.P. shares are held by institutional investors. 2.0% of Terra Nitrogen Company, L.P. shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Terra Nitrogen Company, L.P. beats Rentech Nitrogen Partners on 8 of the 9 factors compared between the two stocks.

About Terra Nitrogen Company, L.P.

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.

About Rentech Nitrogen Partners

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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