Contrasting Sherwin-Williams (NYSE:SHW) and Sociedad Quimica y Minera (NYSE:SQM)

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

Earnings & Valuation

This table compares Sherwin-Williams and Sociedad Quimica y Minera”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sherwin-Williams	$23.57 billion	3.64	$2.57 billion	$10.88	32.68
Sociedad Quimica y Minera	$4.58 billion	3.40	$588.14 million	$4.85	11.22

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

Analyst Ratings

This is a breakdown of recent ratings for Sherwin-Williams and Sociedad Quimica y Minera, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sherwin-Williams	0	12	15	0	2.56
Sociedad Quimica y Minera	2	4	6	1	2.46

Sherwin-Williams presently has a consensus price target of $377.29, indicating a potential upside of 6.10%. Sociedad Quimica y Minera has a consensus price target of $80.11, indicating a potential upside of 47.27%. Given Sociedad Quimica y Minera’s higher probable upside, analysts plainly believe Sociedad Quimica y Minera is more favorable than Sherwin-Williams.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sherwin-Williams	10.74%	69.51%	11.04%
Sociedad Quimica y Minera	20.62%	18.20%	9.46%

Institutional & Insider Ownership

77.7% of Sherwin-Williams shares are owned by institutional investors. Comparatively, 12.4% of Sociedad Quimica y Minera shares are owned by institutional investors. 0.2% of Sherwin-Williams shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Sherwin-Williams has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500. Comparatively, Sociedad Quimica y Minera has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500.

Dividends

Sherwin-Williams pays an annual dividend of $3.20 per share and has a dividend yield of 0.9%. Sociedad Quimica y Minera pays an annual dividend of $1.69 per share and has a dividend yield of 3.1%. Sherwin-Williams pays out 29.4% of its earnings in the form of a dividend. Sociedad Quimica y Minera pays out 34.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Sherwin-Williams has increased its dividend for 48 consecutive years.

Summary

Sherwin-Williams beats Sociedad Quimica y Minera on 13 of the 18 factors compared between the two stocks.

About Sherwin-Williams

The Sherwin-Williams Company is a global manufacturer, retailer and distributor of paints and coatings. Founded in 1866 and headquartered in Cleveland, Ohio, the company serves customers through company-operated paint stores, home improvement retailers, distributors and other channels. Its products include paints, stains and related supplies for homes and commercial buildings, as well as coatings for industrial, automotive, protective and marine applications. The company markets products under brands including Sherwin-Williams and Valspar.

About Sociedad Quimica y Minera

Sociedad Química y Minera de Chile, known as SQM, is a Chilean mining and chemical company that produces lithium and lithium derivatives, iodine, potassium nitrate, specialty plant nutrients and other industrial chemicals. Its products serve industries including energy storage, agriculture, pharmaceuticals and manufacturing. The company’s operations are centered in northern Chile, including the Atacama Desert, where it extracts minerals and other resources from salt flats and mineral deposits. SQM sells its products to customers in Chile and international markets.