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

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Investors interested in stocks from the Fertilizers sector have probably already heard of Nutrien (NTR) and SQM (SQM). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, both Nutrien and SQM are holding a Zacks Rank of # 1 (Strong Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

NTR currently has a forward P/E ratio of 5.83, while SQM has a forward P/E of 14.23. We also note that NTR has a PEG ratio of 0.73. 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 0.80.

Another notable valuation metric for NTR is its P/B ratio of 2.15. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, SQM has a P/B of 9.22.

These metrics, and several others, help NTR earn a Value grade of B, while SQM has been given a Value grade of F.

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


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Nutrien Ltd. (NTR) : Free Stock Analysis Report
 
Sociedad Quimica y Minera S.A. (SQM) : Free Stock Analysis Report
 
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