Daily Stock Pick: Compass Minerals (CMP)

This week, I'm looking for the fifth materials representative of nine for my Ivy portfolio.

The materials sector includes includes thirteen industries all tied to the mining or manufacturing of basic stuff we need. Commodities: such as agricultural inputs, aluminum; building materials, chemicals, coal, copper, gold, industrial metals, lumber & wood, paper, silver, specialty chemicals, and steel.

Today I'm reviewing a small-cap industrial metals and minerals company named Compass Minerals International Inc. Its trading ticker symbol is CMP. I last reported on Compass back on November 19th.

Compass Minerals produces two primary products: salt and sulfate of potash, a specialty fertilizer. 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 fertilizer products are used by growers of high-value crops that are sensitive to standard potash.

The company was formerly known as Salt Holdings Corporation and changed its name to Compass Minerals International, Inc. in December 2003. Compass Minerals International, Inc. was founded in 1993 and is headquartered in Overland Park, Kansas.

I use three key data points to gauge the value of any dividend equity-like Compass Minerals International Inc:

(1) Price

(2) Dividends

(3) Returns

Besides those three, several other keys will finally unlock an equity or fund in which to invest.

Those first three primary keys, however, best tell whether a company has made, is making, and will make money.

CMP Price

Compass's price per share closed at $53.34 yesterday. A year ago its price was $69.05. Price fell $15.71 or 22.75% in the past year.

Assuming Compass's stock trades in the range of $40.00 to $70.00 this year,

Compass's recent $53.34 price could rise by $6.66 and go to $60.00 by early May 2020.

CMP Dividends

Compass's most recent declared quarterly dividend was $0.72 declared February 14th and paid, March 15th.

A $0.72 Q dividend equates to an annual payout of $2.88 for a yield of 5.4% at yesterday's $53.34 closing price.

Gains For CMP?

Adding a $2.88 annual estimated dividend to my $6.66 estimate of CMP's price upside shows a $9.54 potential gross annual gain, per share, which will be reduced by costs to trade those shares.

Say we pay a little over $1,000.00 today at the $53.34 recent stock price would buy us 19 Compass Minerals International Inc shares.

A $10 broker fee paid half at purchase and half at sale will cost us $0.53 per share.

Subtract that $0.53 brokerage cost from the estimated $9.54 gross annual gain leaves a net gain of $9.01 X 19 shares

= $171.19 or a 17.1% net gain on a $1,013.46 investment.

Therefore, Compass Minerals International Inc whose trading ticker symbol is CMP, now shows a possible net gain of  17.1% including a 5.4% dividend yield.

Ten brokers cover Compass's stock:

Three say "buy" CMP.

Two say CMP will "outperform" its peers.

Four say "hold" CMP.

One says CMP will "underperform" its peers.

The consensus score is 2.3 or "outperform".

Therefore, you can look at Compass Minerals International Inc and see it has made money, is making money, and could net a 17.1% gain including a 2.85% dividend yield. It could be more, it could be less.

The above speculation is based on past year performance. The actual results remain to be seen to determine if Compass Minerals International Inc is worth your time and money.

Disclosure: This article was compiled by Rydlun & ...

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