NYSE:SQM

Stock Analysis Report

Sociedad Química y Minera de Chile

Executive Summary

Sociedad Química y Minera de Chile S.A. produces and distributes specialty plant nutrients, iodine and its derivatives, lithium and its derivatives, industrial chemicals, potassium, and other products and services.

Rewards

Trading at 70.4% below its fair value

Earnings are forecast to grow 18.01% per year

Risk Analysis

Has a high level of debt

Dividend of 5.47% is not well covered by earnings



Snowflake Analysis

Adequate balance sheet average dividend payer.


Similar Companies

Share Price & News

How has Sociedad Química y Minera de Chile's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SQM has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.7%

SQM

1.6%

US Chemicals

1.8%

US Market


1 Year Return

-26.1%

SQM

-3.7%

US Chemicals

20.1%

US Market

Return vs Industry: SQM underperformed the US Chemicals industry which returned -3.7% over the past year.

Return vs Market: SQM underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

SQMIndustryMarket
7 Day3.7%1.6%1.8%
30 Day-0.4%-1.4%1.4%
90 Day27.2%-0.9%8.8%
1 Year-24.0%-26.1%10.1%-3.7%22.7%20.1%
3 Year3.9%-4.5%29.9%5.2%50.1%40.4%
5 Year36.9%17.7%38.4%8.4%72.9%53.9%

Price Volatility Vs. Market

How volatile is Sociedad Química y Minera de Chile's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Sociedad Química y Minera de Chile undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SQM ($30.57) is trading below our estimate of fair value ($103.36)

Significantly Below Fair Value: SQM is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SQM is poor value based on its PE Ratio (25.2x) compared to the Chemicals industry average (22.2x).

PE vs Market: SQM is poor value based on its PE Ratio (25.2x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: SQM is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: SQM is overvalued based on its PB Ratio (3.8x) compared to the US Chemicals industry average (2.2x).


Next Steps

Future Growth

How is Sociedad Química y Minera de Chile forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

18.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SQM's forecast earnings growth (18% per year) is above the savings rate (1.7%).

Earnings vs Market: SQM's earnings (18% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: SQM's earnings are forecast to grow, but not significantly.

Revenue vs Market: SQM's revenue (11.3% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: SQM's revenue (11.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SQM's Return on Equity is forecast to be low in 3 years time (18.9%).


Next Steps

Past Performance

How has Sociedad Química y Minera de Chile performed over the past 5 years?

14.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SQM has high quality earnings.

Growing Profit Margin: SQM's current net profit margins (15.7%) are lower than last year (19.4%).


Past Earnings Growth Analysis

Earnings Trend: SQM's earnings have grown by 14.4% per year over the past 5 years.

Accelerating Growth: SQM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SQM had negative earnings growth (-27.6%) over the past year, making it difficult to compare to the Chemicals industry average (-14.6%).


Return on Equity

High ROE: SQM's Return on Equity (15.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Sociedad Química y Minera de Chile's financial position?


Financial Position Analysis

Short Term Liabilities: SQM's short term assets ($2.7B) exceed its short term liabilities ($982.1M).

Long Term Liabilities: SQM's short term assets ($2.7B) exceed its long term liabilities ($1.6B).


Debt to Equity History and Analysis

Debt Level: SQM's debt to equity ratio (83.3%) is considered high.

Reducing Debt: SQM's debt to equity ratio has increased from 69.8% to 83.3% over the past 5 years.

Debt Coverage: SQM's debt is well covered by operating cash flow (22.9%).

Interest Coverage: SQM's interest payments on its debt are well covered by EBIT (12.4x coverage).


Balance Sheet

Inventory Level: SQM has a high level of physical assets or inventory.

Debt Coverage by Assets: SQM's debt is covered by short term assets (assets are 1.5x debt).


Next Steps

Dividend

What is Sociedad Química y Minera de Chile's current dividend yield, its reliability and sustainability?

5.47%

Current Dividend Yield


Dividend Yield vs Market

company5.5%marketbottom25%1.4%markettop25%3.7%industryaverage2.2%forecastin3Years3.0%

Current dividend yield vs market & industry

Notable Dividend: SQM's dividend (5.47%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: SQM's dividend (5.47%) is in the top 25% of dividend payers in the US market (3.68%)


Stability and Growth of Payments

Stable Dividend: SQM's dividend payments have been volatile in the past 10 years.

Growing Dividend: SQM's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (100%), SQM's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SQM's dividends in 3 years are forecast to be well covered by earnings (48.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.3yrs

Average management tenure


CEO

Ricardo Ramos Rodríguez 0

1.1yrs

Tenure

0

Mr. Ricardo Ramos Rodríguez has been Chief Executive Officer of Sociedad Quimica y Minera de Chile S.A. since January 8, 2019. Mr. Rodríguez served as Deputy Chief Executive Officer of Sociedad Química y M ...


Leadership Team

NamePositionTenureCompensationOwnership
Ricardo Ramos Rodríguez
Chief Executive Officer1.1yrsno datano data
Gerardo Illanes
CFO & VP of Corporate Finance0yrsno datano data
Kelly O'Brien
Head of Investor Relations0yrsno datano data
Gonzalo T. Aguirre
General Counsel3.4yrsno datano data
Francisco Sanchez
Risk Management & Compliance Officer0.8yrsno datano data
Daniel Sch. Jiménez
Vice President of Sales Iodine18.1yrsno datano data

2.3yrs

Average Tenure

Experienced Management: SQM's management team is considered experienced (2.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Hernán Büchi Buc
Independent Director26.8yrsUS$293.18mno data
Gonzalo Guerrero Yamamoto
Independent Director3.8yrsUS$258.17mno data
Patricio Contesse Fica
Vice Chairman1.8yrsUS$76.42mno data
Laurence Riveros
Independent Director1.8yrsUS$88.46mno data
Alberto Salas Muñoz
Independent Chairman1.8yrsUS$98.01mno data
Georges de Bourguignon Arndt
Director0.8yrsno datano data
Francisco Ugarte Larraín
Director0.8yrsno datano data
Robert Zatta
Director0.8yrsno datano data

1.8yrs

Average Tenure

Experienced Board: SQM's board of directors are not considered experienced ( 1.8 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Sociedad Química y Minera de Chile S.A.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Sociedad Química y Minera de Chile S.A.
  • Ticker: SQM
  • Exchange: NYSE
  • Founded: 1968
  • Industry: Fertilizers and Agricultural Chemicals
  • Sector: Materials
  • Market Cap: US$8.046b
  • Shares outstanding: 263.20m
  • Website: https://www.sqm.com

Number of Employees


Location

  • Sociedad Química y Minera de Chile S.A.
  • El Trovador No. 4285
  • 6th Floor
  • Santiago
  • Region Metropolitana (Santiago)
  • Chile

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SQM-ASNSE (Santiago Stock Exchange)Series A Preferred SharesCLCLPOct 1992
SQMNYSE (New York Stock Exchange)YesSPON ADR SER BUSUSDSep 1993
QYMDB (Deutsche Boerse AG)YesSPON ADR SER BDEEURSep 1993
0TDGLSE (London Stock Exchange)YesSPON ADR SER BGBUSDSep 1993
SQM-BSNSE (Santiago Stock Exchange)Series B Preferred SharesCLCLPJun 1994

Biography

Sociedad Química y Minera de Chile S.A. produces and distributes specialty plant nutrients, iodine and its derivatives, lithium and its derivatives, industrial chemicals, potassium, and other products and services. The company offers specialty plant nutrients, including potassium nitrate, sodium nitrate, sodium potassium nitrate, specialty blends, and other specialty fertilizers for crops, such as vegetables, fruits, and flowers under the Ultrasol, Qrop, Speedfol, and Allganic brands. It also provides iodine and its derivatives for use in medical, pharmaceutical, agricultural, and industrial applications comprising x-ray contrast media, polarizing films for LCD and LED, antiseptics, biocides and disinfectants, pharmaceutical synthesis, electronics, pigments, and dye components. In addition, the company offers lithium carbonates for various applications that include electrochemical materials for batteries, frits for the ceramic and enamel industries, heat-resistant glass, air conditioning chemicals, continuous casting powder for steel extrusion, primary aluminum smelting process, pharmaceuticals, and lithium derivatives. Further, it supplies lithium hydroxide for the lubricating greases industry, as well as cathodes for batteries. Additionally, it offers potassium chloride and potassium sulfate for various crops; industrial chemicals, including sodium nitrate, potassium nitrate, potassium chloride, and solar salts under the QSodiumNitrate, QPotassiumNitrate, and QPotassiumChloride brands; and other fertilizers and blends. The company sells its products through sales offices and a network of distributors in Chile, Latin America, the Caribbean, Europe, North America, Asia, Central and South America, and internationally. Sociedad Química y Minera de Chile S.A. was founded in 1968 and is headquartered in Santiago, Chile. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 00:56
End of Day Share Price2020/02/14 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.