Is NYSE:SQM a Good Fit for Dividend Investing?

Last update: Oct 2, 2023

QUIMICA Y MINERA CHIL-SP ADR (NYSE:SQM) was identified as a stock worth exploring by dividend investors by our stock screener. NYSE:SQM scores well on profitability, solvency and liquidity. At the same time it seems to pay a decent dividend. We'll explore this a bit deeper below.

What does the Dividend looks like for NYSE:SQM

ChartMill assigns a Dividend Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing various dividend elements, such as yield, historical performance, dividend growth, and sustainability. NYSE:SQM has been awarded a 8 for its dividend quality:

SQM has a Yearly Dividend Yield of 10.90%, which is a nice return.
SQM's Dividend Yield is rather good when compared to the industry average which is at 2.04. SQM pays more dividend than 100.00% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.68, SQM pays a better dividend.
On average, the dividend of SQM grows each year by 98.58%, which is quite nice.
SQM has been paying a dividend for at least 10 years, so it has a reliable track record.
SQM's earnings are growing more than its dividend. This makes the dividend growth sustainable.

Deciphering NYSE:SQM's Health Rating

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:SQM has achieved a 8 out of 10:

SQM has an Altman-Z score of 5.32. This indicates that SQM is financially healthy and has little risk of bankruptcy at the moment.
SQM has a better Altman-Z score (5.32) than 81.61% of its industry peers.
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.
The Debt to FCF ratio of SQM (2.06) is better than 90.80% 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.
SQM has a Current Ratio of 2.48. This indicates that SQM is financially healthy and has no problem in meeting its short term obligations.
SQM has a Current ratio of 2.48. This is in the better half of the industry: SQM outperforms 60.92% of its industry peers.
With a decent Quick ratio value of 1.81, SQM is doing good in the industry, outperforming 68.97% of the companies in the same industry.

Assessing Profitability for NYSE:SQM

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:SQM, the assigned 10 is noteworthy for profitability:

SQM's Return On Assets of 34.56% is amongst the best of the industry. SQM outperforms 100.00% of its industry peers.
SQM has a better Return On Equity (71.10%) than 100.00% of its industry peers.
SQM's Return On Invested Capital of 46.56% is amongst the best of the industry. SQM outperforms 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 11.32%.
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 97.70% of its industry peers.
In the last couple of years the Profit Margin of SQM has grown nicely.
Looking at the Operating Margin, with a value of 49.99%, SQM belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Operating Margin of SQM has grown nicely.
SQM has a better Gross Margin (51.46%) than 100.00% of its industry peers.
SQM's Gross Margin has improved in the last couple of years.

Every day, new Best Dividend stocks can be found on ChartMill in our Best Dividend screener.

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

Disclaimer

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.