Agrium (NYSE: AGU) and Compass Minerals International (NYSE:CMP) are both mid-cap basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, profitability, analyst recommendations, earnings, dividends and risk.

Analyst Recommendations

This is a summary of current ratings and price targets for Agrium and Compass Minerals International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Agrium 0 7 7 0 2.50
Compass Minerals International 0 3 2 0 2.40

Agrium presently has a consensus target price of $107.20, indicating a potential downside of 0.68%. Compass Minerals International has a consensus target price of $71.00, indicating a potential upside of 18.14%. Given Compass Minerals International’s higher probable upside, analysts plainly believe Compass Minerals International is more favorable than Agrium.

Earnings and Valuation

This table compares Agrium and Compass Minerals International’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Agrium $13.56 billion 1.10 $1.62 billion $4.15 26.01
Compass Minerals International $1.24 billion 1.64 $248.20 million $3.58 16.79

Agrium has higher revenue and earnings than Compass Minerals International. Compass Minerals International is trading at a lower price-to-earnings ratio than Agrium, indicating that it is currently the more affordable of the two stocks.

Dividends

Agrium pays an annual dividend of $3.50 per share and has a dividend yield of 3.2%. Compass Minerals International pays an annual dividend of $2.88 per share and has a dividend yield of 4.8%. Agrium pays out 84.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Compass Minerals International pays out 80.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Agrium has raised its dividend for 13 consecutive years and Compass Minerals International has raised its dividend for 5 consecutive years. Compass Minerals International is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Agrium and Compass Minerals International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Agrium 4.22% 9.69% 3.54%
Compass Minerals International 9.83% 10.01% 3.06%

Volatility & Risk

Agrium has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500. Comparatively, Compass Minerals International has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500.

Institutional and Insider Ownership

66.4% of Agrium shares are owned by institutional investors. 0.8% of Compass Minerals International shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Agrium beats Compass Minerals International on 9 of the 17 factors compared between the two stocks.

About Agrium

Agrium Inc. is a retailer of agricultural products and services in the United States, Canada, Australia, Argentina, Brazil, Chile and Uruguay and a multi-national producer and wholesale marketer of nutrients for agricultural and industrial markets. The Company’s segments include Retail and Wholesale. As of December 31, 2016, its Retail business unit marketed crop nutrients, crop protection products, seed, merchandise, application and other agronomic services through 1,500 retail locations in the United States, Canada, Australia, Argentina, Brazil, Chile and Uruguay. Its Wholesale business unit manufactures, mines and markets a range of nutrients, including nitrogen-based, potash and phosphate-based crop nutrient products. As of December 31, 2016, its Wholesale business unit owned and operated five North American nitrogen facilities, four located in Alberta, Canada and one in Borger, Texas, United States.

About Compass Minerals International

Compass Minerals International, Inc. (CMI) is a provider of essential minerals that solve nature’s challenges, including salt for winter roadway safety and other consumer, industrial and agricultural uses; specialty plant nutrition minerals for the quality and yield of crops, and specialty chemicals for water treatment and other industrial processes. The Company has three segments: Salt, Plant Nutrition North America and Plant Nutrition South America. The Salt segment produces and markets salt and magnesium chloride for use in road deicing and dust control, food processing, water softeners, and agricultural and industrial applications. Its Plant Nutrition North America segment includes sales of sulfate of potash (SOP) specialty fertilizer and micronutrients. The Plant Nutrition South America segment operates two primary businesses in Brazil: agricultural productivity and chemical solutions.

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