Analyzing American Vanguard Corporation (AVD) & Sociedad Quimica y Minera (SQM)

American Vanguard Corporation (NYSE: AVD) and Sociedad Quimica y Minera (NYSE:SQM) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.

Dividends

American Vanguard Corporation pays an annual dividend of $0.06 per share and has a dividend yield of 0.3%. Sociedad Quimica y Minera pays an annual dividend of $1.41 per share and has a dividend yield of 2.9%. American Vanguard Corporation pays out 12.0% of its earnings in the form of a dividend. Sociedad Quimica y Minera pays out 109.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Vanguard Corporation has raised its dividend for 3 consecutive years.

Insider and Institutional Ownership

76.9% of American Vanguard Corporation shares are owned by institutional investors. Comparatively, 13.7% of Sociedad Quimica y Minera shares are owned by institutional investors. 4.7% of American Vanguard Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings for American Vanguard Corporation and Sociedad Quimica y Minera, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Vanguard Corporation 0 1 1 1 3.00
Sociedad Quimica y Minera 0 4 1 0 2.20

American Vanguard Corporation presently has a consensus target price of $19.50, suggesting a potential downside of 2.99%. Sociedad Quimica y Minera has a consensus target price of $39.33, suggesting a potential downside of 18.80%. Given American Vanguard Corporation’s stronger consensus rating and higher probable upside, equities analysts clearly believe American Vanguard Corporation is more favorable than Sociedad Quimica y Minera.

Valuation and Earnings

This table compares American Vanguard Corporation and Sociedad Quimica y Minera’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Vanguard Corporation $318.49 million 1.88 $44.28 million $0.50 40.20
Sociedad Quimica y Minera $2.08 billion 6.20 $838.10 million $1.29 37.55

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

Risk and Volatility

American Vanguard Corporation has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500. Comparatively, Sociedad Quimica y Minera has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500.

Profitability

This table compares American Vanguard Corporation and Sociedad Quimica y Minera’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Vanguard Corporation 4.56% 5.10% 3.34%
Sociedad Quimica y Minera 16.28% 14.81% 7.98%

Summary

American Vanguard Corporation beats Sociedad Quimica y Minera on 9 of the 17 factors compared between the two stocks.

American Vanguard Corporation Company Profile

American Vanguard Corporation operates as a holding company. The Company conducts its business through its subsidiaries, AMVAC Chemical Corporation (AMVAC), GemChem, Inc. (GemChem), 2110 Davie Corporation (DAVIE), Quimica Amvac de Mexico S.A. de C.V. (AMVAC M), AMVAC Mexico Sociedad de Responsabilidad Limitada (AMVAC M Srl), AMVAC de Costa Rica Sociedad de Responsabilidad Limitada (AMVAC CR Srl), AMVAC Switzerland GmbH (AMVAC S), AMVAC do Brasil Representacoes Ltda (AMVAC B), AMVAC C.V. (AMVAC CV), AMVAC Netherlands BV (AMVAC BV), Envance Technologies, LLC (Envance), AMVAC Singapore Pte, Ltd (AMVAC Sgpr) and Huifeng AMVAC Innovation Co. Limited (Hong Kong JV). AMVAC is a specialty chemical manufacturer that develops and markets products for agricultural, commercial and consumer uses. It manufactures and formulates chemicals, such as insecticides, fungicides, herbicides, molluscicides and soil fumigants for crops, turf and ornamental plants, and human and animal health protection.

Sociedad Quimica y Minera Company Profile

Sociedad Quimica y Minera de Chile S.A. (SQM), is a producer of potassium nitrate and iodine. The Company produces specialty plant nutrients, iodine derivatives, lithium and its derivatives, potassium chloride, potassium sulfate and certain industrial chemicals. Its segments include specialty plant nutrients, industrial chemicals, iodine and derivatives, lithium and derivatives, potassium, and other products and services. Specialty plant nutrients are fertilizers that enable farmers to improve yields and the quality of certain crops. Industrial chemicals have a range of applications in chemical processes, such as the manufacturing of glass and industrial nitrates. Iodine and its derivatives are used in the X-ray contrast media and biocides industries, among others. Lithium and its derivatives are used in batteries, greases and frits for production of ceramics. Potassium chloride is a commodity fertilizer that is produced and sold by the Company across the world.

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