Compass Minerals International produces and markets salt, sulfate of potash specialty fertilizer (SOP), plant micronutrients, and magnesium chloride primarily in North America and the United Kingdom. The company was founded in 1993 and is based in Overland Park, Kansas.
CMP Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for CMP, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Compass Minerals International Inc ranked in the 46th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 8.83%. The most interesting components of our discounted cash flow analysis for Compass Minerals International Inc ended up being:
The business' balance sheet suggests that 39% of the company's capital is sourced from debt; this is greater than 66.55% of the free cash flow producing stocks we're observing.
Compass Minerals International Inc's effective tax rate, as measured by taxes paid relative to net income, is at 13 -- greater than 52.05% of US stocks with positive free cash flow.
The company's cost of debt, derived from its interest coverage, tax rate, and market capitalization, is greater than 49.47% of stocks in its sector (Basic Materials).
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Basic Materials that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as CMP, try FSI, MTRN, RPM, SBSW, and ARLP.
Last June, around the time when investor pessimism with regard to Compass Minerals (CMP) had reached a crescendo, I wrote an article analyzing whether its competitive advantage had survived the prior years of damage and assessing its near-term outlook. I came to the conclusion that "the sustainable competitive advantage commanded...
Laurentian Research on Seeking Alpha | August 26, 2020
Compass Minerals (NYSE: CMP), a leading global provider of essential minerals, will release its second-quarter 2020 financial results Tuesday, Aug. 4, after the markets close. The company’s president and CEO, Kevin Crutchfield, and CFO, Jamie Standen, will discuss these results on a conference call on Wednesday, Aug. 5, at 10 a.m. ET.