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How Does SQM Compare to Its Peers?

Gabriel Kane

SQM’s Revenue and Income Fell in 3Q15

(Continued from Prior Part)

Sociedad Química y Minera de Chile and its peers

In this article, we’ll compare Sociedad Química y Minera de Chile (SQM) to its industry peers and a few of its ETFs:

  • The PE (price-to-earnings) ratios of Sociedad Química y Minera de Chile (SQM), Potash Corporation of Saskatchewan (POT), The Mosaic Company (MOS), and Compass Minerals International (CMP) are 20.3x, 11.5x, 9.6x, and 15.4x, respectively, as of November 17, 2015.

  • The PBV (price-to-book value) ratios of SQM, POT, MOS, FMC Corporation (FMC), and CMP are 2.1x, 2.0x, 1.2x, 2.7x, and 4.5x, respectively.

Thus, SQM has outperformed its peers based on PE ratio.

ETFs that invest in SQM

The Global X Lithium ETF (LIT) invests 9.4% of its holdings in SQM. The ETF tracks a market cap–weighted index of global lithium producers.

The Global X Fertilizers/Potash ETF (SOIL) invests 5.0% of its holdings in SQM. The ETF tracks a market cap–weighted index of the largest and most liquid fertilizer producers around the world.

The iShares Latin America 40 ETF (ILF) invests 0.53% of its holdings in SQM. The ETF tracks a market cap–weighted index of 40 of the largest Latin American firms.

Comparing SQM and its ETFs

Below is an analysis of SQM and the ETFs described above:

  • The YTD (year-to-date) price movements of SQM, LIT, SOIL, and ILF are -22.0%, -8.3%, -6.4%, and -25.1%, respectively.

  • The PE ratios of SQM, LIT, SOIL, and ILF are 20.3x, 28.9x, 13.4x, and 16.9x, respectively.

  • The PBV ratios of SQM, LIT, SOIL, and ILF are 2.1x, 1.6x, 1.5x, and 1.4x, respectively.

According to the above findings, these ETFs are mostly ahead of SQM based on price movement. However, SQM has outperformed most of these ETFs based on PE and PBV ratios.

Browse this series on Market Realist: