Agrium (NYSE: AGU) and Sociedad Quimica y Minera (NYSE:SQM) are both large-cap basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, dividends, valuation, earnings, profitability, risk and institutional ownership.

Dividends

Agrium pays an annual dividend of $3.50 per share and has a dividend yield of 3.6%. Sociedad Quimica y Minera pays an annual dividend of $1.16 per share and has a dividend yield of 2.7%. Agrium pays out 84.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sociedad Quimica y Minera pays out 94.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Agrium has increased its dividend for 5 consecutive years and Sociedad Quimica y Minera has increased its dividend for 3 consecutive years. Agrium is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Agrium has a beta of 0.62, indicating that its stock price is 38% less volatile than the S&P 500. Comparatively, Sociedad Quimica y Minera has a beta of 1.06, indicating that its stock price is 6% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Agrium and Sociedad Quimica y Minera, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Agrium 1 7 8 0 2.44
Sociedad Quimica y Minera 0 4 1 0 2.20

Agrium presently has a consensus target price of $104.67, suggesting a potential upside of 7.69%. Sociedad Quimica y Minera has a consensus target price of $36.00, suggesting a potential downside of 16.10%. Given Agrium’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Agrium is more favorable than Sociedad Quimica y Minera.

Valuation and Earnings

This table compares Agrium and Sociedad Quimica y Minera’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Agrium $13.56 billion 0.99 $1.62 billion $4.15 23.42
Sociedad Quimica y Minera $2.08 billion 5.43 $810.31 million $1.23 34.89

Agrium has higher revenue and earnings than Sociedad Quimica y Minera. Agrium 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.

Institutional & Insider Ownership

68.4% of Agrium shares are owned by institutional investors. Comparatively, 16.7% of Sociedad Quimica y Minera shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Agrium and Sociedad Quimica y Minera’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Agrium 4.22% 9.69% 3.54%
Sociedad Quimica y Minera 15.53% 13.99% 7.57%

Summary

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

Agrium Company Profile

Agrium Inc. is a retailer of agricultural products and services in the United States, Canada, Australia, Argentina, Brazil, Chile and Uruguay and a multi-national producer and wholesale marketer of nutrients for agricultural and industrial markets. The Company’s segments include Retail and Wholesale. As of December 31, 2016, its Retail business unit marketed crop nutrients, crop protection products, seed, merchandise, application and other agronomic services through 1,500 retail locations in the United States, Canada, Australia, Argentina, Brazil, Chile and Uruguay. Its Wholesale business unit manufactures, mines and markets a range of nutrients, including nitrogen-based, potash and phosphate-based crop nutrient products. As of December 31, 2016, its Wholesale business unit owned and operated five North American nitrogen facilities, four located in Alberta, Canada and one in Borger, Texas, United States.

Sociedad Quimica y Minera Company Profile

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.

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