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MOS vs. SQM: Which Stock Should Value Investors Buy Now?

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·2 min read
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  • SQM
  • MOS

Investors interested in stocks from the Fertilizers sector have probably already heard of Mosaic (MOS) and SQM (SQM). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Both Mosaic and SQM have a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

MOS currently has a forward P/E ratio of 7.93, while SQM has a forward P/E of 39.05. We also note that MOS has a PEG ratio of 1.13. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. SQM currently has a PEG ratio of 1.20.

Another notable valuation metric for MOS is its P/B ratio of 1.11. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, SQM has a P/B of 5.94.

These are just a few of the metrics contributing to MOS's Value grade of A and SQM's Value grade of D.

Both MOS and SQM are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that MOS is the superior value option right now.


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The Mosaic Company (MOS) : Free Stock Analysis Report
 
Sociedad Quimica y Minera S.A. (SQM) : Free Stock Analysis Report
 
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