Head to Head Review: Sociedad Quimica y Minera (SQM) & Agrium (AGU)
Sociedad Quimica y Minera (NYSE: SQM) and Agrium (NYSE:AGU) are both mid-cap basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, profitabiliy, institutional ownership, analyst recommendations, dividends and earnings.
Sociedad Quimica y Minera pays an annual dividend of $1.16 per share and has a dividend yield of 3.1%. Agrium pays an annual dividend of $3.50 per share and has a dividend yield of 3.6%. Sociedad Quimica y Minera pays out 94.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Agrium pays out 83.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sociedad Quimica y Minera has raised its dividend for 5 consecutive years and Agrium has raised its dividend for 3 consecutive years. Agrium is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a breakdown of recent ratings and target prices for Sociedad Quimica y Minera and Agrium, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Sociedad Quimica y Minera||0||4||1||0||2.20|
Sociedad Quimica y Minera currently has a consensus target price of $36.00, indicating a potential downside of 4.08%. Agrium has a consensus target price of $104.50, indicating a potential upside of 6.29%. Given Agrium’s stronger consensus rating and higher probable upside, analysts plainly believe Agrium is more favorable than Sociedad Quimica y Minera.
Institutional & Insider Ownership
15.8% of Sociedad Quimica y Minera shares are owned by institutional investors. Comparatively, 69.1% of Agrium shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
This table compares Sociedad Quimica y Minera and Agrium’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Sociedad Quimica y Minera||15.53%||13.99%||7.57%|
Volatility and Risk
Sociedad Quimica y Minera has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500. Comparatively, Agrium has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.
Valuation and Earnings
This table compares Sociedad Quimica y Minera and Agrium’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Sociedad Quimica y Minera||$2.08 billion||4.75||$810.31 million||$1.23||30.51|
|Agrium||$13.66 billion||0.99||$1.57 billion||$4.21||23.35|
Agrium has higher revenue and earnings than Sociedad Quimica y Minera. Agrium is trading at a lower price-to-earnings ratio than Sociedad Quimica y Minera, indicating that it is currently the more affordable of the two stocks.
Agrium beats Sociedad Quimica y Minera on 9 of the 16 factors compared between the two stocks.
Sociedad Quimica y Minera Company Profile
Sociedad Quimica y Minera de Chile S.A. (SQM), is a producer of potassium nitrate and iodine. The Company produces specialty plant nutrients, iodine derivatives, lithium and its derivatives, potassium chloride, potassium sulfate and certain industrial chemicals. Its segments include specialty plant nutrients, industrial chemicals, iodine and derivatives, lithium and derivatives, potassium, and other products and services. Specialty plant nutrients are fertilizers that enable farmers to improve yields and the quality of certain crops. Industrial chemicals have a range of applications in chemical processes, such as the manufacturing of glass and industrial nitrates. Iodine and its derivatives are used in the X-ray contrast media and biocides industries, among others. Lithium and its derivatives are used in batteries, greases and frits for production of ceramics. Potassium chloride is a commodity fertilizer that is produced and sold by the Company across the world.
Agrium Company Profile
Agrium Inc. is a retailer of agricultural products and services in the United States, Canada, Australia, Argentina, Brazil, Chile and Uruguay and a multi-national producer and wholesale marketer of nutrients for agricultural and industrial markets. The Company’s segments include Retail and Wholesale. As of December 31, 2016, its Retail business unit marketed crop nutrients, crop protection products, seed, merchandise, application and other agronomic services through 1,500 retail locations in the United States, Canada, Australia, Argentina, Brazil, Chile and Uruguay. Its Wholesale business unit manufactures, mines and markets a range of nutrients, including nitrogen-based, potash and phosphate-based crop nutrient products. As of December 31, 2016, its Wholesale business unit owned and operated five North American nitrogen facilities, four located in Alberta, Canada and one in Borger, Texas, United States.
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