Why NYSE:SQM provides a good dividend, while having solid fundamentals.

Last update: Oct 5, 2023

QUIMICA Y MINERA CHIL-SP ADR (NYSE:SQM) has caught the attention of dividend investors as a stock worth considering. NYSE:SQM excels in profitability, solvency, and liquidity, all while providing a decent dividend. Let's delve into the details.

Assessing Dividend Metrics for NYSE:SQM

An integral part of ChartMill's stock analysis is the Dividend Rating, which spans from 0 to 10. This rating evaluates diverse dividend factors, including yield, historical data, growth, and sustainability. NYSE:SQM has received a 8 out of 10:

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.
SQM's Dividend Yield is rather good when compared to the S&P500 average which is at 2.68.
The dividend of SQM is nicely growing with an annual growth rate of 98.58%!
SQM has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of SQM is growing, but earnings are growing more, so the dividend growth is sustainable.

Health Assessment of NYSE:SQM

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NYSE:SQM was assigned a score of 8 for health:

An Altman-Z score of 5.18 indicates that SQM is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 5.18, SQM belongs to the best of the industry, outperforming 81.61% 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.
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.
A Current Ratio of 2.48 indicates that SQM has no problem at all paying its short term obligations.
SQM has a better Current ratio (2.48) than 60.92% of its industry peers.
The Quick ratio of SQM (1.81) is better than 68.97% of its industry peers.

How do we evaluate the Profitability for NYSE:SQM?

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NYSE:SQM has achieved a 10:

The Return On Assets of SQM (34.56%) is better than 100.00% of its industry peers.
With an excellent Return On Equity value of 71.10%, SQM belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 46.56%, SQM belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
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.
The Profit Margin of SQM (35.24%) is better than 97.70% of its industry peers.
In the last couple of years the Profit Margin of SQM has grown nicely.
With an excellent Operating Margin value of 49.99%, SQM belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
SQM's Operating Margin has improved in the last couple of years.
SQM's Gross Margin of 51.46% is amongst the best of the industry. SQM outperforms 100.00% of its industry peers.
In the last couple of years the Gross Margin of SQM has grown nicely.

Our Best Dividend screener lists more Best Dividend stocks and is updated daily.

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.