Critical Analysis: Compass Minerals International (NYSE:CMP) and Air Products and Chemicals (NYSE:APD)

Air Products and Chemicals (NYSE:APD) and Compass Minerals International (NYSE:CMP) are both basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, profitability and earnings.

Institutional & Insider Ownership

81.7% of Air Products and Chemicals shares are owned by institutional investors. Comparatively, 99.8% of Compass Minerals International shares are owned by institutional investors. 1.9% of Air Products and Chemicals shares are owned by insiders. Comparatively, 1.0% of Compass Minerals International shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Air Products and Chemicals has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, Compass Minerals International has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Air Products and Chemicals	-2.73%	15.77%	6.75%
Compass Minerals International	-2.82%	8.69%	1.39%

Analyst Ratings

This is a summary of recent ratings and price targets for Air Products and Chemicals and Compass Minerals International, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Air Products and Chemicals	0	6	10	0	2.63
Compass Minerals International	2	1	1	1	2.20

Air Products and Chemicals presently has a consensus target price of $300.88, suggesting a potential upside of 2.91%. Compass Minerals International has a consensus target price of $22.00, suggesting a potential downside of 4.66%. Given Air Products and Chemicals’ stronger consensus rating and higher possible upside, research analysts plainly believe Air Products and Chemicals is more favorable than Compass Minerals International.

Valuation and Earnings

This table compares Air Products and Chemicals and Compass Minerals International”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Air Products and Chemicals	$12.04 billion	5.41	-$394.50 million	($1.51)	-193.63
Compass Minerals International	$1.24 billion	0.78	-$79.80 million	($0.92)	-25.08

Compass Minerals International has lower revenue, but higher earnings than Air Products and Chemicals. Air Products and Chemicals 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.

Summary

Air Products and Chemicals beats Compass Minerals International on 9 of the 15 factors compared between the two stocks.

About Air Products and Chemicals

Air Products and Chemicals, Inc. provides atmospheric gases, process and specialty gases, equipment, and related services in the Americas, Asia, Europe, the Middle East, India, and internationally. The company produces atmospheric gases, including oxygen, nitrogen, and argon; process gases, such as hydrogen, helium, carbon dioxide, carbon monoxide, and syngas; and specialty gases for customers in various industries, including refining, chemical, manufacturing, electronics, energy production, medical, food, and metals. It also designs and manufactures equipment for air separation, hydrocarbon recovery and purification, natural gas liquefaction, and liquid helium and liquid hydrogen transport and storage. The company was founded in 1940 and is headquartered in Allentown, Pennsylvania.

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.