Compass Minerals (CMP) Lowers Quarterly Dividend 79.2% to $0.15; 0.8% Yield

Compass Minerals (NYSE: CMP) declared a quarterly dividend of $0.15 per share, or $0.6 annualized. This is a 79.2% decrease from the prior dividend of $0.72.

The dividend will be payable on December 20, 2021, to stockholders of record on December 10, 2021, with an ex-dividend date of December 9, 2021.

The annual yield on the dividend is 0.8 percent.

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Compass Minerals (NYSE: CMP), a leading global provider of essential minerals, 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 Dec. 20, 2021, to shareholders of record as of the close of business on Dec. 10, 2021.

Compass Minerals 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.

The company previously indicated that it was undertaking a reassessment of its capital allocation strategy as part of its July 2021 announcement of a 2.4 million metric ton sustainable lithium resource identified at its Ogden, Utah, solar evaporation site. The purpose of the assessment was to weigh the intrinsic value creation potential of recently announced growth opportunities in the lithium and fire retardant markets against the historical practice of returning capital through dividends. Since that time, the company’s board of directors and senior management team have jointly evaluated a number of potential scenarios to better align the dividend level with the company’s expected future capital allocation needs, peer trends and current equity market dynamics.

“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.”

As previously announced, Compass Minerals is in the process of developing a battery-grade lithium hydroxide capability with an estimated, initial annual production capacity of approximately 20,000 to 25,000 metric tons lithium carbonate equivalent by 2025. The company also recently announced it is acquiring a 45% minority ownership stake in Fortress North America (Fortress), a next-generation fire retardant company dedicated to producing more environmentally friendly and carbon neutral fire retardants to combat the devastating effects of wildfires. Magnesium chloride, a key raw material input to Fortress’ products, is derived from Compass Minerals’ Great Salt Lake solar evaporation production stream.

For a dividend history and other dividend-related data on Compass Minerals (CMP) click here.

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