NYSE:SQM appears to be flying under the radar despite its strong fundamentals.

Last update: Feb 21, 2024

Our stock screening tool has pinpointed QUIMICA Y MINERA CHIL-SP ADR (NYSE:SQM) as an undervalued stock. NYSE:SQM maintains a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.

Valuation Analysis for NYSE:SQM

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NYSE:SQM, the assigned 7 reflects its valuation:

SQM is valuated cheaply with a Price/Earnings ratio of 3.14.
98.84% of the companies in the same industry are more expensive than SQM, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 26.00. SQM is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 4.37, the valuation of SQM can be described as very cheap.
Based on the Price/Forward Earnings ratio, SQM is valued cheaper than 98.84% of the companies in the same industry.
SQM is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.37, which is the current average of the S&P500 Index.
SQM's Price/Free Cash Flow ratio is rather cheap when compared to the industry. SQM is cheaper than 98.84% of the companies in the same industry.
The excellent profitability rating of SQM may justify a higher PE ratio.

Profitability Assessment of 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.
Looking at the Return On Equity, with a value of 71.10%, SQM belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
The Return On Invested Capital of SQM (46.56%) is better than 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 11.40%.
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's Profit Margin of 35.24% is amongst the best of the industry. SQM outperforms 98.84% of its industry peers.
SQM's Profit Margin has improved in the last couple of years.
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.
In the last couple of years the Operating Margin of SQM has grown nicely.
The Gross Margin of SQM (51.46%) is better than 98.84% of its industry peers.
SQM's Gross Margin has improved in the last couple of years.

Unpacking NYSE:SQM's Health Rating

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NYSE:SQM has earned a 8 out of 10:

An Altman-Z score of 4.80 indicates that SQM is not in any danger for bankruptcy at the moment.
SQM has a Altman-Z score of 4.80. This is amongst the best in the industry. SQM outperforms 81.40% of its industry peers.
The Debt to FCF ratio of SQM is 2.06, which is a good value as it means it would take SQM, 2.06 years of fcf income to pay off all of its debts.
SQM has a better Debt to FCF ratio (2.06) than 88.37% 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.
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.
Looking at the Current ratio, with a value of 2.48, SQM is in the better half of the industry, outperforming 62.79% of the companies in the same industry.
The Quick ratio of SQM (1.81) is better than 67.44% of its industry peers.

Evaluating Growth: NYSE:SQM

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NYSE:SQM was assigned a score of 5 for growth:

SQM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 193.91%, which is quite impressive.
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.
Looking at the last year, SQM shows a very strong growth in Revenue. The Revenue has grown by 151.62%.
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.

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

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.