Compass Minerals (CMP) cuts dividend by 79.2 percent

Compass Minerals (CMP), a leading global provider of essential minerals, will cut its dividend by almost 80 percent to 15 cents quarterly per share in 2021.

Compass today announced a new direction for the company’s capital allocation strategy. Specifically, the company’s board of directors has declared a quarterly cash dividend of $0.15 per share, enabling the company to reinvest additional capital in recently announced growth projects. This dividend is payable December 20, 2021, to shareholders of record as of the close of business on December 10, 2021.

A new annual dividend of 60 cents per share will yield 1.2% at a stock price of $50.64. Compass last hiked its dividend by 3.6 percent in 2017. At $50.60 per share the stock is down 18% in 2021.

Compass Minerals states that it expects to reinvest the approximately $80 million of cash it anticipates retaining annually from this dividend reduction primarily toward a strategic expansion of the company’s essential minerals product portfolio. As a result, the company expects to meaningfully increase both its earnings capacity and shareholder value over the long term while maintaining strong liquidity levels. Compass Minerals’ board of directors will continue to evaluate the company’s capital allocation needs on an ongoing basis to balance supporting the investment needs of the business with returning cash to shareholders.

“I believe our decision to prioritize high-potential, organic growth opportunities positions our company to deliver meaningfully improved and lasting returns, while still providing a stable and sustainable distribution of cash flow to shareholders,” said Kevin S. Crutchfield, president and CEO. “The decision to reduce our dividend is not something we took lightly; however, upon rigorous assessment, it became abundantly clear that there are simply higher and better uses for a portion of that capital in view of our ultimate goal to maximize value creation for our diversified shareholder base. I am excited by the opportunity to expand our product offerings in the coming years to satisfy a market need for these essential minerals.”

Compass Minerals (symbol: CMP) is a leading global provider of essential minerals focused on safely delivering where and when it matters to help solve nature’s challenges for customers and communities. The company’s salt products help keep roadways safe during winter weather and are used in numerous other consumer, industrial and agricultural applications. Its plant nutrition business manufactures products that improve the quality and yield of crops, while supporting sustainable agriculture. And its specialty chemical business serves the water treatment industry and other industrial processes. Additionally, the company is pursuing development of a sustainable lithium brine resource to support the North American battery market and is a minority owner of Fortress North America, a next-generation fire retardant company. Compass Minerals operates 15 production and packaging facilities with more than 2,000 employees throughout the U.S., Canada, the U.K. and Brazil.