The One Reason To Invest In CF Industries Stock Trefis Team Tue, November 10, 2026 at 7:19 PM EST 4 min read CF +2.58% ^GSPC -0.38% NTR -0.24% MOS +0.88% LXU +3.82% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
For questions about this article or underlying research, email help@trefis.com.
CF Industries (CF) stock returned 49.5% over the past year, against 13.7% for the S&P 500. The one reason to own it, however, is the buyback. CF Industries cut its diluted share count by 21.4% over the three years to September 2026, giving each remaining share a larger slice of the company's earnings. So what has that larger slice of earnings been worth to a shareholder?
CF Industries' Earnings Per Share Outgrew Net Income
Each share's earnings grew 9.6% a year over those three years, while CF Industries' net income grew 1.1% a year. The difference is the shrinking share count: a profit that barely grew was split among far fewer shares. The rise was not steady, since earnings per share fell 41.2% in the twelve months to September 2024 before recovering. Part of the latest profit is also a one-off, as the first nine months of 2026 include a gain of about $170 million from a litigation. That gain is larger than the whole three-year rise in twelve-month net income, from $2.11 billion to $2.18 billion.
Over the past twelve months, share repurchases net of stock pay came to 5.2% of CF Industries' market value at the November 9 close. The stock trades at 8.3 times earnings, against 21.8 for the S&P 500. At that multiple, each dollar spent on shares retires more earnings than it would at the market's multiple. Management said on the November 5 call that it does not believe the company's earnings power is fully reflected in its valuation, and that this supports continued repurchases.
How Does CF Industries Pay For Its Buyback?
CF Industries pays for the buyback out of free cash flow, which came to $2.08 billion over the past twelve months against $1.3 billion returned to shareholders through buybacks and dividends. That cash comes from nitrogen products sold at a wide margin. Ammonia brought in $2.18 billion of revenue in 2025, and Granular Urea accounted for $1.78 billion. Over the past twelve months, the company kept 39.1% of its revenue as operating income, against 19.0% for the S&P 500. Management said the company has run at 97% of its available ammonia capacity since the start of 2026.
What Could Stop CF Industries' Buyback?
A slump in earnings could, far more than debt. On September 30, 2026, cash plus short-term investments came to $2.82 billion. CF Industries' net debt, borrowings minus cash, was about 0.19 times a year's EBITDA at the end of September 2026, and operating income covered interest expense 10.7 times over the past twelve months.
The last slump shows the risk. In the twelve months to September 2024, net income fell 44.9% from a year earlier. That year CF Industries spent $1.38 billion on buybacks against only $0.595 billion of free cash flow, and the difference came out of savings. Dividends of $0.354 billion and other payments also came out of that cash, so cash and short-term investments fell from $3.25 billion to $1.88 billion. Free cash flow was low mainly because capital spending rose to about $1.7 billion, out of $2.33 billion of cash from operations.
CF Industries also has a new plant to pay for. Management said on the November 5 call that the company's 40% share of the remaining investment in the Blue Point One ammonia plant will be spread over three years, and called it manageable given its free cash flow. The whole plant is projected to cost $3.7 billion. Management also said nitrogen values remained below the peaks they reached in the spring, though it expects the global nitrogen supply-demand balance to remain constructive into 2027.
For now, CF Industries pays for its buyback out of the cash its plants earn. The company's free cash flow compared against what it returns to shareholders is the measure to watch when it reports its fourth quarter, expected in February 2027.
What Would Selling CF Industries Cost You In Tax?
If your shares have gained a lot, selling can bring a big tax bill, and holding keeps the risk. A free 30-minute strategy review with our partner advisory firm covers protecting the gain and a lower-tax way to trim.
Spot an error or want more like this? Tell us in 10 seconds.
