We recently published a list of 13 Best Magnesium Stocks to Buy Right Now. In this article, we are going to take a look at where Compass Minerals International, Inc. (NYSE:CMP) stands against other best magnesium stocks to buy right now.

Magnesium is a key material used in various industrial applications. Magnesium chloride is commonly utilized for deicing roads and as an ingredient in fertilizers. Beyond its industrial uses, magnesium is essential to U.S. national security, as it supports critical sectors such as aerospace, defense, and steel production.

The automotive sector is one of the top magnesium consumers, owing to its lightweight properties, helping enhance fuel efficiency and vehicle performance. Top automakers have already started to use magnesium instead of steel and aluminum in several components, according to the International Magnesium Association. For example, a magnesium alloy wheel can reduce weight by 32% compared to aluminum. The shift toward lighter materials has helped the automotive sector meet stricter fuel economy and emission standards, transforming magnesium into an essential material in modern vehicle design.

As such, the global magnesium industry has seen strong growth in the past years, with its size forecasted to reach $4.97 billion in 2025, up from $4.67 billion in 2024, at a growth rate of 6.4%, as per The Business Research Company. This growth has primarily been driven by the rising demand for lightweight materials in the automotive industry, the increasing adoption of magnesium alloys in aerospace applications, and its widespread usage in medical implants as well as consumer electronics. The industry’s growth is also supplemented by government initiatives promoting magnesium.

Furthermore, magnesium has broader implications for efficiency due to its ability to reduce vehicle weight remarkably. According to estimates by the U.S. Automotive Material Partnership, using 150 lbs of magnesium instead of 500 lbs of steel, or 90 lbs of magnesium instead of 150 lbs of aluminum can help reduce vehicle weight by 15%. This property can save over 5 billion gallons of fuel by 2030 as magnesium gets integrated into 25% of the vehicles in the U.S. Such positives add to magnesium’s role in the shift of industry toward sustainability and cost efficiency.

Additionally, the increasing demand for battery electric vehicles (BEVs) further cement magnesium’s market. According to S&P Global Mobility, BEV sales worldwide are expected to reach 15.1 million units in 2025, a 30% surge from 2024. These sales would account for 16.7% of total light vehicle sales. As the automotive market shifts toward prioritizing weight reduction to increase battery range and efficiency, magnesium alloys are anticipated to play an important role in vehicle design.

Apart from the automotive sector, emerging trends in the magnesium market are powering innovation across sectors. Medical applications are driving the development of new magnesium-based materials, including biodegradable implants that dissolve naturally in the body, leaving no residue. This development could revolutionize the medical industry, providing more sustainable and safer options to traditional implant materials.

Additionally, as the world moves toward sustainable and recyclable materials, magnesium’s appeal is increasing in various sectors. The environmental impact of magnesium is expected to lower, as advancements are being made in magnesium recycling technologies, in line with global sustainability goals while potentially driving cost efficiency. The magnesium recycling market is expected to reach $1.03 billion by 2032, up from $558.8 million in 2023, increasing at a CAGR of 7.1%, according to Custom Market Insights. Such growth points toward the increasing role of recycled magnesium in addressing industrial demand, as well as reducing dependency on primary extraction.

Magnesium holds an essential position in the automotive and aerospace industries, driven by its high strength-to-weight ratio and high melting point. Around 70% of global magnesium produced is being used for alloy manufacturing currently, adding to its importance in structural applications. Thus, as various sectors look to move toward lightweight, durable, and eco-friendly materials, magnesium’s role is expected to grow in the global market, strengthening the trajectory of its long-term growth.

Our Methodology

To come up with our list of the 13 Best Magnesium Stocks to Buy Right now, we first identified companies with significant exposure in the magnesium industry. This exposure is measured through magnesium mining, refining, or production of magnesium-based materials. We then shortlisted stocks on the basis of the number of hedge funds invested in them as of Q4 2024, using Insider Monkey’s hedge fund database. The top stocks are the ones with the highest hedge fund interest.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Compass Minerals International, Inc. (NYSE:CMP)

Number of Hedge Fund Holders: 31

Compass Minerals International, Inc. (NYSE:CMP), is a producer of salt, magnesium chloride, essential minerals, and plant nutrition items. It operates across the U.K., North America, and international markets. The company functions through its Plant Nutrition and Salt segments, producing potash sulfate, sodium chloride, and magnesium chloride-based fire retardants. The company’s potential growth in the magnesium sector can be demonstrated by the total measured and indicated magnesium resources of 91.6 million tons.

Compass Minerals International, Inc. (NYSE:CMP) generated 671,486 tons of magnesium chloride for the fiscal year ending September 30, 2024. Accordingly, the company reported revenue of $307 million in Q1 FY 2025, a drop of 10% year-over-year. Although the Salt segment volumes decreased by 13%, it generated $242 million, with a 1% price rise to $97 per ton. Despite a 9% decline in pricing for the Plant Nutrition segments, it witnessed a 24% surge in revenue to $50 million, fueled by a 36% increase in sales volumes.

Furthermore, Compass Minerals International, Inc. (NYSE:CMP) aims to decrease highway deicing inventory by 10% as it continues to optimize inventory management. While the early winter conditions in October and November were mild, the winter weather intensified in December and January, increasing salt sales. Overall segment performance was majorly driven by the main component, Magnesium chloride, due to its deicing and dust control products.

Looking ahead to 2025, the company anticipates a 9% year-over-year growth in sales volumes, with adjusted EBITDA forecasted between $225 million and $250 million. By optimizing operations at Ogden Plant Nutrition complex, the company aims to improve cash flow, stabilize sulfate of potash (SOP), and decrease overall costs. As such, it is placed among the best magnesium stocks.

Overall, CMP ranks 6th on our list of best magnesium stocks to buy right now. While we acknowledge the potential of CMP, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CMP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.