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

Analyst Ratings

This is a breakdown of current recommendations and price targets for Monsanto and Compass Minerals International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Monsanto 0 7 8 0 2.53
Compass Minerals International 0 2 0 0 2.00

Monsanto currently has a consensus price target of $123.62, suggesting a potential upside of 5.20%. Compass Minerals International has a consensus price target of $69.00, suggesting a potential upside of 0.58%. Given Monsanto’s stronger consensus rating and higher probable upside, analysts clearly believe Monsanto is more favorable than Compass Minerals International.

Earnings and Valuation

This table compares Monsanto 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
Monsanto $14.52 billion 3.56 $4.19 billion $4.62 25.43
Compass Minerals International $1.18 billion 1.97 $250.70 million $3.95 17.37

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

Profitability

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

Net Margins Return on Equity Return on Assets
Monsanto 14.11% 45.26% 11.37%
Compass Minerals International 11.40% 11.86% 3.88%

Risk and Volatility

Monsanto has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500. Comparatively, Compass Minerals International has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500.

Institutional and Insider Ownership

75.0% of Monsanto shares are held by institutional investors. 0.8% of Monsanto shares are held by company insiders. Comparatively, 0.8% of Compass Minerals International shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Monsanto pays an annual dividend of $2.16 per share and has a dividend yield of 1.8%. Compass Minerals International pays an annual dividend of $2.88 per share and has a dividend yield of 4.2%. Monsanto pays out 46.8% of its earnings in the form of a dividend. Compass Minerals International pays out 72.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Monsanto has raised its dividend for 13 consecutive years and Compass Minerals International has raised its dividend for 7 consecutive years.

Summary

Monsanto beats Compass Minerals International on 16 of the 17 factors compared between the two stocks.

About Monsanto

Monsanto Company (Monsanto), along with its subsidiaries, is a provider of agricultural products for farmers. The Company provides seeds, biotechnology trait products, herbicides and digital agriculture tools to farmers. The Company operates through two segments: Seeds and Genomics, and Agricultural Productivity. Through its Seeds and Genomics segment, the Company produces seed brands, including DEKALB, Asgrow, Deltapine, Seminis and De Ruiter, and it develops biotechnology traits that assist farmers in controlling insects and weeds and digital agriculture to assist farmers in decision-making. The Seeds and Genomics segment offers products, such as Germplasm and Biotechnology traits. Through its Agricultural Productivity segment, the Company manufactures Roundup brand herbicides and other herbicides and provides lawn-and-garden herbicide products for the residential market.

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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