High growth potential with excellent balance sheet
Over the past year, SQM has grown its earnings by 35.70%, with its most recent figure exceeding its annual average over the past five years. Not only did SQM outperformed its past performance, its growth also exceeded the Chemicals industry expansion, which generated a 15.35% earnings growth. This is what investors like to see!
SQM’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. SQM’s has produced operating cash levels of 0.65x total debt over the past year, which implies that SQM’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
For Sociedad Química y Minera de Chile, I’ve put together three fundamental factors you should further examine:
- Valuation: What is SQM worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether SQM is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does SQM return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from SQM as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of SQM? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!