Balancing Dividends and Fundamentals: The Case of NYSE:SQM.

Last update: Oct 6, 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 for NYSE:SQM

ChartMill assigns a Dividend Rating to every stock. This score ranges from 0 to 10 and evaluates the different dividend aspects, including the yield, the growth and sustainability. NYSE:SQM scores 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.
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 paid a dividend for at least 10 years, which is 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

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:SQM, the assigned 8 reflects its health status:

SQM has an Altman-Z score of 5.12. This indicates that SQM is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of SQM (5.12) is better 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.
SQM has a better Debt to FCF ratio (2.06) than 90.80% of its industry peers.
SQM has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
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 60.92% of its industry peers.
Looking at the Quick ratio, with a value of 1.81, SQM is in the better half of the industry, outperforming 68.97% of the companies in the same industry.

Analyzing Profitability Metrics

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.
SQM has a Return On Equity of 71.10%. This is amongst the best in the industry. SQM outperforms 100.00% of its industry peers.
SQM has a Return On Invested Capital of 46.56%. This is amongst the best in the industry. SQM outperforms 100.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for SQM is significantly above the industry average of 11.32%.
The 3 year average ROIC (22.85%) for SQM is below the current ROIC(46.56%), indicating increased profibility in the last year.
SQM's Profit Margin of 35.24% is amongst the best of the industry. SQM outperforms 97.70% of its industry peers.
In the last couple of years the Profit Margin of SQM has grown nicely.
SQM has a Operating Margin of 49.99%. This is amongst the best in the industry. SQM outperforms 100.00% of its industry peers.
SQM's Operating Margin has improved in the last couple of years.
SQM has a better Gross Margin (51.46%) than 100.00% of its industry peers.
In the last couple of years the Gross Margin of SQM has grown nicely.

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For an up to date full fundamental analysis you can check the fundamental report of SQM

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.