Sociedad Quimica y Minera (NYSE: SQM) and Israel Chemicals Shs (NYSE:ICL) are both mid-cap basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, valuation, risk, institutional ownership, earnings, analyst recommendations and dividends.

Dividends

Sociedad Quimica y Minera pays an annual dividend of $1.41 per share and has a dividend yield of 2.6%. Israel Chemicals Shs pays an annual dividend of $0.10 per share and has a dividend yield of 2.4%. Sociedad Quimica y Minera pays out 109.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Israel Chemicals Shs pays out -66.7% of its earnings in the form of a dividend. Israel Chemicals Shs has increased its dividend for 3 consecutive years.

Earnings and Valuation

This table compares Sociedad Quimica y Minera and Israel Chemicals Shs’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sociedad Quimica y Minera $2.08 billion 6.95 $838.10 million $1.29 42.11
Israel Chemicals Shs $5.34 billion 1.01 $924.80 million ($0.15) -28.20

Israel Chemicals Shs has higher revenue and earnings than Sociedad Quimica y Minera. Israel Chemicals Shs 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.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Sociedad Quimica y Minera and Israel Chemicals Shs, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sociedad Quimica y Minera 0 5 2 0 2.29
Israel Chemicals Shs 0 2 0 0 2.00

Sociedad Quimica y Minera presently has a consensus target price of $39.33, suggesting a potential downside of 27.59%. Israel Chemicals Shs has a consensus target price of $4.88, suggesting a potential upside of 15.25%. Given Israel Chemicals Shs’ higher probable upside, analysts clearly believe Israel Chemicals Shs is more favorable than Sociedad Quimica y Minera.

Institutional and Insider Ownership

13.7% of Sociedad Quimica y Minera shares are owned by institutional investors. Comparatively, 5.9% of Israel Chemicals Shs shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Sociedad Quimica y Minera and Israel Chemicals Shs’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sociedad Quimica y Minera 16.28% 14.81% 7.98%
Israel Chemicals Shs -3.43% 13.55% 4.20%

Volatility & Risk

Sociedad Quimica y Minera has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500. Comparatively, Israel Chemicals Shs has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500.

Summary

Sociedad Quimica y Minera beats Israel Chemicals Shs on 10 of the 16 factors compared between the two stocks.

About Sociedad Quimica y Minera

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.

About Israel Chemicals Shs

Israel Chemicals Ltd. operates as a specialty minerals company worldwide. The company operates through two segments, Essential Minerals and Specialty Solutions. The company extracts potash from the Dead Sea; mines and produces potash and salt from subterranean mines in Spain and the United Kingdom, as well as uses part of the potash to produce compound fertilizers; mines and processes phosphate rock in open mines; and produces sulfuric acid, agricultural phosphoric acid, phosphate fertilizers, compound fertilizers, liquid fertilizers, and soluble fertilizers. It also manufactures compound fertilizers in the Netherlands, Germany, and Belgium; liquid fertilizers and soluble fertilizers in Spain; slow release and controlled release fertilizers in the Netherlands and the United States; and phosphate-based food additives for livestock in Turkey and Israel. In addition, the company produces bromine out of a solution that is created as a by-product of the potash production process in Sodom, as well as bromine-based products; chlorine-based products in Israel and the United States; and flame retardants and phosphorus based products, as well as extracts salt, magnesia, and chlorine from Dead Sea brine. Further, it purchases clean phosphoric acid and manufactures thermal phosphoric acids, which are used to manufacture downstream products and phosphate salts that are used as a raw material for manufacturing, food additives, hygiene products and flame retardants, and fire extinguishment products. It also manufactures phosphorous derivatives based on phosphorous; specialty products based on aluminum acids; and other raw materials. The company sells its products through marketing companies, agents, and distributors. Israel Chemicals Ltd. was founded in 1968 and is headquartered in Tel Aviv, Israel.

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