Comparing Two Fertilizer Powerhouses: CF Industries and Nutrien in Today's Market

The global fertilizer market is experiencing robust momentum, driven by favorable agricultural conditions and healthy crop economics worldwide. With strong demand across potash, nitrogen, and phosphate segments, investors are evaluating which major players offer the best value proposition. CF Industries Holdings, Inc. (CF) and Nutrien Ltd. (NTR) represent two leading operators in this space, each with distinct operational strengths and market positioning.

Understanding the Market Backdrop

What is NTR’s role in this environment? Nutrien serves as a diversified crop nutrient producer with significant exposure to potash, phosphate, and nitrogen markets. Similarly, CF Industries maintains a concentrated focus on nitrogen fertilizer production. Both companies are capitalizing on a favorable supply-demand dynamic: tight inventories, supply disruptions from geopolitical tensions, and sustained agricultural demand are supporting pricing power across the sector.

Farmer economics remain solid in major growing regions due to strong crop demand and reasonable input affordability. This backdrop is particularly supportive for nitrogen fertilizers in North America, India, and Brazil, as well as for potash in traditional consuming markets.

CF Industries’ Operational Momentum

CF Industries is experiencing significant tailwinds from elevated nitrogen prices and robust global demand. In the third quarter, the company reported net sales of approximately $1.66 billion, representing a 21% year-over-year increase. This revenue surge was underpinned by higher average selling prices driven by global nitrogen demand strength and supply tightness stemming from energy cost pressures abroad.

The company’s cash generation remains impressive, with operating cash flow of $1.06 billion in Q3, up roughly 14% year-over-year. CF returned $1.3 billion to shareholders in the first nine months of 2025 and recently completed a $3 billion repurchase program while initiating a new $2 billion program through 2029. The dividend yield stands at approximately 2.6%, backed by an exceptionally strong five-year annualized growth rate of 14.3% and a conservative 24% payout ratio.

However, rising natural gas costs present a headwind. The average natural gas price increased to $2.96 per MMBtu in Q3 from $2.10 year-ago, with the nine-month average climbing to $3.34 from $2.38 previously.

Nutrien’s Growth and Cost Efficiency Strategy

Nutrien is leveraging healthy crop nutrient demand, strategic cost initiatives, and targeted acquisitions to drive performance. The company achieved record potash sales volumes in the first nine months of 2025, with Q3 volumes boosted by strong North American and offshore consumption. Management raised full-year potash guidance to 14-14.5 million tons, reflecting anticipated global demand strength.

Operating cash flow surged 150% year-over-year to $1,030 million for the nine-month period, reflecting higher selling prices and increased volumes. Nutrien returned $1.2 billion through dividends and repurchases, up approximately 42% from the prior year period. The stock offers a 3.9% dividend yield with a sustainable 57% payout ratio and a five-year annualized dividend growth rate of 4.8%.

A notable advantage is Nutrien’s cost-reduction initiative targeting approximately $200 million in savings for 2025, achieved ahead of schedule. The company is also expanding its Brazil footprint through acquisitions and advancing its digital platform adoption.

Like CF, Nutrien faces input cost pressures—specifically higher sulfur and natural gas prices—which have elevated cost of goods sold in its phosphate and nitrogen operations.

Valuation and Earnings Outlook Comparison

From a valuation perspective, CF trades at a forward 12-month P/E of 10.79, below both Nutrien’s 12.32 multiple and the industry average of 12.21X. This represents a more attractive entry point on a relative basis.

Earnings growth projections favor CF Industries slightly. The consensus estimate for CF’s 2025 sales and EPS anticipates year-over-year increases of 17.6% and 31.8%, respectively. For Nutrien, 2025 estimates suggest 3.5% sales growth and 30.6% EPS growth. Both companies show upward revisions in EPS estimates over the past 60 days.

Stock price performance has diverged notably: NTR is up 25.7% year-to-date, while CF has declined 9%, despite the industry gaining 8%.

Investment Consideration: Which Offers Better Value?

Both companies maintain Zacks Rank #3 (Hold) ratings, reflecting their balanced risk-reward profiles. Each benefits from favorable global agricultural conditions and strong fertilizer demand, while both grapple with elevated input costs.

The decision hinges on investment priorities. CF Industries presents a compelling case for valuation-conscious investors: its lower P/E multiple, superior dividend growth trajectory (14.3% vs. 4.8%), and stronger projected earnings expansion suggest better near-term appreciation potential. Additionally, CF’s higher earnings growth estimates imply more aggressive bottom-line improvement despite similar margin challenges.

Nutrien appeals to investors seeking exposure to potash diversification, established cost management initiatives, and an already appreciated stock price reflecting market confidence in its strategic execution.

In the current environment, CF Industries may offer the edge due to its more attractive valuation and higher earnings growth visibility, though both remain viable holdings within the fertilizer sector.