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Compass Minerals International, Inc. - CMP

Posted on the 27 November 2011 by Divstkforcomman @DivStkForComMan
Compass Minerals International, Inc., stock ticker CMP, currently pays a 45 cent quarterly dividend, which is a 2.59% dividend yield. You should not think that each and every dividend payer with a yield over 2% is worth your time, however CMP is. As stated on their website, "It’s not what you might expect from a mineral company. But as a leading producer of salt, sulfate of potash and magnesium chloride, we touch the lives of millions of people every day. Keeping roads safe. Improving water quality. Growing nutritious fruits and vegetables."  CMP's history stretches back as far as 1844. They became a public company following its initial public offering in December 2003.
In short, CMP and its consolidated subsidiaries is a producer of minerals, including salt, sulfate of potash specialty fertilizer (SOP) and magnesium chloride. As of December 31, 2010, Compass Minerals operated 11 production and packaging facilities, including a rock salt mine in Goderich, Ontario and Canada, and a salt mine in the United Kingdom in Winsford, Cheshire. Its solar evaporation facility located in Ogden, Utah, is a solar salt production site in North America. It provides highway deicing salt to customers in North America and the United Kingdom and specialty fertilizer to growers and fertilizer distributors worldwide. It has two segments: salt and specialty fertilizer. In January 2011, Compass Minerals acquired Big Quill Resources, Inc., Canada’s SOP producer.
CMP is a fairly easy business to understand and are a hidden gem in the market. They are a long-term small cap investment with a healthy dividend. You can't go wrong with salt and fertilizer. I like this company because their salt sales have a low cost per ton, there is minimal foreign competition and the market tends to be low competition due to geographical constraints. CMP is less dependent on the overall economy as well as the majority of sales are to the highway deicing market which is driven by weather conditions. The consumer segment is also relatively large and is very stable in nature helping stabilize profitability. The portions of the business geared toward chemicals and specialty plant nutrients is a business with significant price fluctuations, but appears to have the potential for growth and may gain pricing power due to supply constraints. I believe the current pricing represents a great value for a long term investor and should outperform the S&P over time.
This company is diversified due to their summer (Fertilizer) and winter (Salt) businesses, it is centrally located for easy shipping to much of the pertinent parts of the nation, and it has a management staff that knows the value of their diversification. Please feel free to visit Compass Minerals International's website, here, as well as their Investor Relations site, here. Also, check out the videos below. Have a great week!

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