What happened

Shares of Compass Minerals (CMP -0.88%) fell nearly 28% last month, according to data provided by S&P Global Market Intelligence. While the stock has underperformed in the last five years due to the business' inability to grow income levels, a one-month drop of that magnitude is very unusual. Turns out there's a solid argument for investor pessimism.

When Compass Minerals reported preliminary third-quarter 2018 earnings in October, the mixed results were accompanied by the announcement that lingering production issues at its salt mine in Ontario, Canada threatened to weigh on earnings for the quarter. Worse still, while a plan is in place to address production shortfalls, there's no guarantee that the mine can ramp up output of road salt in time for winter.

A yellow arrow showing declines in front of a black and white stock chart.

Image source: Getty Images.

So what

The Goderich salt mine in Ontario has been plagued by operational setbacks for over one year. A ceiling collapse in late 2017 reduced production volumes and increased operating costs. When combined with warmer-than-average winters in North America in recent years and weakness in global agricultural markets that weighed on the company's fertilizer business, production issues have forced Compass Minerals to fight for every dollar of operating income it earns.

That explains why investors just haven't found much to get excited about when it comes to the stock -- even with an impressive dividend yield of 5.5%. News of continued production issues entering the final months of 2018 only made investors more confident in their pessimistic stance, especially since it puts more distance between Compass Minerals and its ambitious plans to greatly improve operating margins by 2020.

Now what

On paper, Compass Minerals should be able to deliver consistently strong results anchored by its road-salt operations and small, but growing, specialty fertilizer business. But in reality, the company has run up against production issues, unusually warm winters, and challenging market conditions in agricultural markets.

Time is running out for the business to deliver on its 2020 goals, and the fact that it keeps sliding in the wrong direction can't be overlooked by investors. However, a 5.5% dividend yield and a strong showing in the next two or three quarters could finally change the stock's trajectory.