Sociedad Quimica y Minera (NYSE:SQM – Get Free Report) and Trinseo (NYSE:TSE – Get Free Report) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.
Analyst Ratings
This is a summary of recent recommendations for Sociedad Quimica y Minera and Trinseo, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sociedad Quimica y Minera | 1 | 8 | 5 | 1 | 2.40 |
| Trinseo | 1 | 2 | 0 | 0 | 1.67 |
Sociedad Quimica y Minera currently has a consensus price target of $73.58, suggesting a potential upside of 10.26%. Trinseo has a consensus price target of $1.00, suggesting a potential upside of 334.78%. Given Trinseo’s higher probable upside, analysts clearly believe Trinseo is more favorable than Sociedad Quimica y Minera.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sociedad Quimica y Minera | $4.58 billion | 4.17 | $588.14 million | $2.85 | 23.42 |
| Trinseo | $3.13 billion | 0.00 | -$348.50 million | ($11.55) | -0.02 |
Sociedad Quimica y Minera has higher revenue and earnings than Trinseo. Trinseo is trading at a lower price-to-earnings ratio than Sociedad Quimica y Minera, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
12.4% of Sociedad Quimica y Minera shares are held by institutional investors. Comparatively, 82.7% of Trinseo shares are held by institutional investors. 4.5% of Trinseo shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Risk and Volatility
Sociedad Quimica y Minera has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500. Comparatively, Trinseo has a beta of 1.46, indicating that its stock price is 46% more volatile than the S&P 500.
Profitability
This table compares Sociedad Quimica y Minera and Trinseo’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Sociedad Quimica y Minera | 15.38% | 11.99% | 6.09% |
| Trinseo | -13.15% | N/A | -11.72% |
Dividends
Sociedad Quimica y Minera pays an annual dividend of $2.65 per share and has a dividend yield of 4.0%. Trinseo pays an annual dividend of $0.04 per share and has a dividend yield of 17.4%. Sociedad Quimica y Minera pays out 93.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Trinseo pays out -0.3% of its earnings in the form of a dividend. Trinseo has raised its dividend for 1 consecutive years. Trinseo is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Sociedad Quimica y Minera beats Trinseo on 11 of the 18 factors compared between the two stocks.
About Sociedad Quimica y Minera
Sociedad Química y Minera de Chile S.A. operates as a mining company worldwide. The company offers specialty plant nutrients, including sodium potassium nitrate, specialty blends, and other specialty fertilizers under Ultrasol, Qrop, Speedfol, Allganic, Ultrasoline, ProP, and Prohydric brands. It also provides iodine and its derivatives for use in medical, agricultural, industrial, and human and animal nutrition products comprising x-ray contrast media, biocides, antiseptics and disinfectants, pharmaceutical intermediates, polarizing films for LCD and LED screens, chemicals, organic compounds, and pigments, as well as added to edible salt to prevent iodine deficiency disorders. In addition, the company produces lithium carbonate and lithium hydroxide which are used in the production of cathode material for secondary batteries; lithium chloride; and basic lithium chemicals and lithium derivatives used in lubricating greases for heat-resistant glass, chips for the ceramic and glazing industry, and air conditioning chemicals, as well as other pharmaceutical syntheses and metal alloys. Further, it produces potassium sulfate; and potassium chloride which is used as a fertilizer for the application of potassium to different crops. Additionally, the company produces and markets industrial chemicals, such as sodium nitrate mainly used in the production of glass and explosives, metal processing and recycling, and production of insulating materials and adhesives; potassium nitrate used as a raw material to produce frits and special glass, as well as in the enamel, metal treatment, and pyrotechnic sectors; solar salts used as a thermal storage medium in solar power generation plants; and potassium chloride as an additive in oil drilling and food processing sectors. Furthermore, it is involved in the commercialization of third-party fertilizers; and exploration of copper, gold, and silver deposits. The company was founded in 1926 and is headquartered in Santiago, Chile.
About Trinseo
Trinseo PLC operates as a specialty material solutions provider in the United States, Europe, the Asia-Pacific, and internationally. It operates through five segments: Engineered Materials, Latex Binders, Plastics Solutions, Polystyrene, and Americas Styrenics. The Engineered Materials segment offers rigid thermoplastic compounds and blends, soft thermoplastic, continuous cast, cell cast, activated methyl methacrylates (MMA), PMMA resins, and extruded PMMA sheets and resins for consumer electronics, medical, footwear, automotive, and building and construction applications under the EMERGE, CALIBRE, PLEXIGLAS, ALTUGLAS, ACRYSPA, AVONITE, STUDIO, MEGOL, APILON, APIGO, and APINAT brands. The Latex Binders segment provides styrene-butadiene latex, and other latex polymers and binders primarily for coated paper and packaging board, carpet, and artificial turf backings, as well as the adhesive, building and construction, and technical textile paper market. The Plastics Solutions segment offers acrylonitrile-butadiene-styrene, styrene-acrylonitrile, polycarbonate, and compounds and blends for automotive and other applications under the MAGNUM brand. The Polystyrene segment provides general purpose polystyrenes and high impact polystyrene for use in appliances, food packaging and food service disposables, consumer electronics, and building and construction materials under the STYRON brand. The Americas Styrenics segment provides styrene and polystyrene for appliances, food packaging, food service disposables, consumer electronics, and building and construction materials applications. Trinseo PLC was incorporated in 2015 and is headquartered in Wayne, Pennsylvania.
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