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NYSE:SQM, an undervalued stock with good fundamentals.

By Mill Chart

Last update: Mar 14, 2024

QUIMICA Y MINERA CHIL-SP ADR (NYSE:SQM) has caught the attention of our stock screener as a great value stock. NYSE:SQM excels in profitability, solvency, and liquidity, all while being very reasonably priced. Let's delve into the details.

How We Gauge Valuation for NYSE:SQM

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NYSE:SQM has received a 7 out of 10:

  • A Price/Earnings ratio of 3.73 indicates a rather cheap valuation of SQM.
  • Compared to the rest of the industry, the Price/Earnings ratio of SQM indicates a rather cheap valuation: SQM is cheaper than 98.82% of the companies listed in the same industry.
  • Compared to an average S&P500 Price/Earnings ratio of 26.01, SQM is valued rather cheaply.
  • With a Price/Forward Earnings ratio of 6.14, the valuation of SQM can be described as very cheap.
  • Based on the Price/Forward Earnings ratio, SQM is valued cheaply inside the industry as 98.82% of the companies are valued more expensively.
  • SQM is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.32, which is the current average of the S&P500 Index.
  • Based on the Price/Free Cash Flow ratio, SQM is valued cheaply inside the industry as 94.12% of the companies are valued more expensively.
  • The excellent profitability rating of SQM may justify a higher PE ratio.

Profitability Examination for NYSE:SQM

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:SQM has earned a 9 out of 10:

  • SQM has a better Return On Assets (34.56%) than 100.00% of its industry peers.
  • The Return On Equity of SQM (71.10%) is better than 100.00% of its industry peers.
  • The Return On Invested Capital of SQM (46.56%) is better than 100.00% of its industry peers.
  • SQM had an Average Return On Invested Capital over the past 3 years of 22.85%. This is significantly above the industry average of 11.67%.
  • The last Return On Invested Capital (46.56%) for SQM is above the 3 year average (22.85%), which is a sign of increasing profitability.
  • SQM has a Profit Margin of 35.24%. This is amongst the best in the industry. SQM outperforms 98.82% of its industry peers.
  • SQM's Profit Margin has improved in the last couple of years.
  • SQM has a Operating Margin of 49.99%. This is amongst the best in the industry. SQM outperforms 100.00% of its industry peers.
  • In the last couple of years the Operating Margin of SQM has grown nicely.
  • The Gross Margin of SQM (51.46%) is better than 97.65% of its industry peers.
  • SQM's Gross Margin has improved in the last couple of years.

Assessing Health for NYSE:SQM

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:SQM scores a 8 out of 10:

  • SQM has an Altman-Z score of 5.04. This indicates that SQM is financially healthy and has little risk of bankruptcy at the moment.
  • With an excellent Altman-Z score value of 5.04, SQM belongs to the best of the industry, outperforming 82.35% of the companies in the same industry.
  • SQM has a debt to FCF ratio of 2.06. This is a good value and a sign of high solvency as SQM would need 2.06 years to pay back of all of its debts.
  • SQM has a better Debt to FCF ratio (2.06) than 89.41% of its industry peers.
  • A Debt/Equity ratio of 0.45 indicates that SQM is not too dependend on debt financing.
  • Although SQM does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
  • A Current Ratio of 2.48 indicates that SQM has no problem at all paying its short term obligations.
  • SQM has a Current ratio of 2.48. This is in the better half of the industry: SQM outperforms 64.71% of its industry peers.
  • SQM has a better Quick ratio (1.81) than 67.06% of its industry peers.

Evaluating Growth: NYSE:SQM

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:SQM has earned a 5 for growth:

  • The Earnings Per Share has grown by an impressive 193.91% over the past year.
  • Measured over the past years, SQM shows a very strong growth in Earnings Per Share. The EPS has been growing by 52.96% on average per year.
  • The Revenue has grown by 151.62% in the past year. This is a very strong growth!
  • SQM shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 37.78% yearly.

More Decent Value stocks can be found in our Decent Value screener.

Our latest full fundamental report of SQM contains the most current fundamental analsysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.

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QUIMICA Y MINERA CHIL-SP ADR

NYSE:SQM (5/17/2024, 7:04:01 PM)

After market: 47.85 0 (0%)

47.85

-0.12 (-0.25%)

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