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Compass Minerals International Inc CMP

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Maintaining $78 FVE as Compass' First-Quarter Results Show Lower Salt Costs; Shares Undervalued

Seth Goldstein, CFA Senior Equity Analyst

Analyst Note

| Seth Goldstein, CFA |

Compass Minerals’ first-quarter results showed tangible progress on the company's goal to fully restore its low-cost salt operation. In salt, adjusted EBITDA was up 37% versus the prior-year quarter as higher volumes and lower unit costs were partially offset by lower highway deicing salt contract prices. During the quarter, salt unit production costs fell nearly 13% from the prior-year quarter. The results were consistent with our view that Compass would be able to sharply reduce costs as it fully restores the low-cost Goderich mine. With our outlook largely unchanged, we maintain our $78 per share fair value estimate. Our wide moat rating, based on the firm's cost-advantaged salt production, is also unchanged. 

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Company Profile

Business Description

Compass Minerals produces two primary products: salt and specialty fertilizers. The company's main assets include rock salt mines in Ontario, Louisiana, and the United Kingdom and salt brine operations at the Great Salt Lake in Utah. Compass' salt products are used for deicing and also by industrial and consumer end markets. The firm's largest specialty fertilizer product is sulfate of potash, which is used by growers of high-value crops that are sensitive to standard potash.

Contact
9900 West 109th Street, Suite 100
Overland Park, KS, 66210
T +1 913 344-9200
Sector Basic Materials
Industry Other Industrial Metals & Mining
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type High Yield
Employees 3,229

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