Comparing Compass Minerals International (NYSE:CMP) & Tronox (NYSE:TROX)

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

Insider and Institutional Ownership

73.4% of Tronox shares are owned by institutional investors. Comparatively, 99.8% of Compass Minerals International shares are owned by institutional investors. 2.0% of Tronox shares are owned by company insiders. Comparatively, 1.0% of Compass Minerals International shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Tronox and Compass Minerals International”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tronox	$2.90 billion	0.35	-$470.00 million	($2.92)	-2.16
Compass Minerals International	$1.24 billion	1.05	-$79.80 million	$0.15	207.90

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

Volatility and Risk

Tronox has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500. Comparatively, Compass Minerals International has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Tronox and Compass Minerals International, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tronox	3	6	2	0	1.91
Compass Minerals International	1	3	1	0	2.00

Tronox currently has a consensus target price of $7.14, suggesting a potential upside of 13.43%. Compass Minerals International has a consensus target price of $28.80, suggesting a potential downside of 7.65%. Given Tronox’s higher probable upside, research analysts clearly believe Tronox is more favorable than Compass Minerals International.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Tronox	-15.82%	-19.93%	-4.86%
Compass Minerals International	0.55%	8.99%	1.54%

Summary

Compass Minerals International beats Tronox on 10 of the 14 factors compared between the two stocks.

About Tronox

Tronox Holdings plc operates as a vertically integrated manufacturer of TiO2 pigment in North America, South and Central America, Europe, the Middle East, Africa, and the Asia Pacific. The company operates titanium-bearing mineral sand mines; and engages in beneficiation and smelting operations. It offers TiO2 pigment; ultrafine specialty TiO2; zircon; feedstock; pig iron; monazite; titanium tetrachloride; and other products. The company’s products are used for the manufacture of paints, coatings, plastics, and paper, as well as various other applications. Tronox Holdings plc is based in Stamford, Connecticut.

About Compass Minerals International

Compass Minerals International, Inc., provides essential minerals in the United States, Canada, the United Kingdom, and internationally. It operates through two segments, Salt and Plant Nutrition. The Salt segment produces, markets, and sells sodium chloride and magnesium chloride, including rock salt, mechanically and solar evaporated salt, and brine and flake magnesium chloride products; and purchases potassium chloride and calcium chloride to sell as finished products or to blend with sodium chloride to produce specialty products. This segment provides products for use as a deicer for roadways, consumer, and professional use; as an ingredient in chemical production; for water treatment, human, and animal nutrition; and for various other consumer and industrial uses, as well as records management services. The Plant Nutrition segment produces sulfate of potash specialty fertilizers in various grades that are used in broadcast spreaders, direct application, and liquid fertilizer solutions under the Protassium+ brand name; turf products used by the turf and ornamental markets, as well as for blends used on golf course greens; organic products; and develops and produces a portfolio of magnesium chloride-based aerial and ground fire retardant products. This segment provides its products to distributors and retailers of crop inputs, as well as growers. The company was formerly known as Salt Holdings Corporation and changed its name to Compass Minerals International, Inc. in December 2003. Compass Minerals International, Inc. was founded in 1844 and is headquartered in Overland Park, Kansas.