Sociedad Quimica y Minera (NYSE: SQM) and American Vanguard Corporation (NYSE:AVD) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, risk and analyst recommendations.

Earnings & Valuation

This table compares Sociedad Quimica y Minera and American Vanguard Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sociedad Quimica y Minera $2.08 billion 6.04 $810.31 million $1.29 36.98
American Vanguard Corporation $318.49 million 1.87 $44.28 million $0.50 39.90

Sociedad Quimica y Minera has higher revenue and earnings than American Vanguard Corporation. Sociedad Quimica y Minera is trading at a lower price-to-earnings ratio than American Vanguard Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

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

Net Margins Return on Equity Return on Assets
Sociedad Quimica y Minera 16.28% 14.81% 7.98%
American Vanguard Corporation 4.56% 5.10% 3.34%

Institutional and Insider Ownership

16.7% of Sociedad Quimica y Minera shares are held by institutional investors. Comparatively, 77.8% of American Vanguard Corporation shares are held by institutional investors. 4.7% of American Vanguard Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Sociedad Quimica y Minera pays an annual dividend of $1.16 per share and has a dividend yield of 2.4%. American Vanguard Corporation pays an annual dividend of $0.06 per share and has a dividend yield of 0.3%. Sociedad Quimica y Minera pays out 89.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Vanguard Corporation pays out 12.0% of its earnings in the form of a dividend. Sociedad Quimica y Minera has raised its dividend for 3 consecutive years. Sociedad Quimica y Minera is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Sociedad Quimica y Minera has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, American Vanguard Corporation has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Sociedad Quimica y Minera and American Vanguard Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sociedad Quimica y Minera 0 4 1 0 2.20
American Vanguard Corporation 0 1 1 1 3.00

Sociedad Quimica y Minera currently has a consensus price target of $36.00, suggesting a potential downside of 24.54%. American Vanguard Corporation has a consensus price target of $19.50, suggesting a potential downside of 2.26%. Given American Vanguard Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe American Vanguard Corporation is more favorable than Sociedad Quimica y Minera.

Summary

Sociedad Quimica y Minera beats American Vanguard Corporation on 9 of the 17 factors compared between the two stocks.

About Sociedad Quimica y Minera

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.

About American Vanguard Corporation

American Vanguard Corporation operates as a holding company. The Company conducts its business through its subsidiaries, AMVAC Chemical Corporation (AMVAC), GemChem, Inc. (GemChem), 2110 Davie Corporation (DAVIE), Quimica Amvac de Mexico S.A. de C.V. (AMVAC M), AMVAC Mexico Sociedad de Responsabilidad Limitada (AMVAC M Srl), AMVAC de Costa Rica Sociedad de Responsabilidad Limitada (AMVAC CR Srl), AMVAC Switzerland GmbH (AMVAC S), AMVAC do Brasil Representacoes Ltda (AMVAC B), AMVAC C.V. (AMVAC CV), AMVAC Netherlands BV (AMVAC BV), Envance Technologies, LLC (Envance), AMVAC Singapore Pte, Ltd (AMVAC Sgpr) and Huifeng AMVAC Innovation Co. Limited (Hong Kong JV). AMVAC is a specialty chemical manufacturer that develops and markets products for agricultural, commercial and consumer uses. It manufactures and formulates chemicals, such as insecticides, fungicides, herbicides, molluscicides and soil fumigants for crops, turf and ornamental plants, and human and animal health protection.

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