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Should You Buy Sociedad Quimica y Minera de Chile (SQM) Stock Monday?

Monday, September 28, 2020 12:08 PM | InvestorsObserver Analysts

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Should You Buy Sociedad Quimica y Minera de Chile (SQM) Stock Monday?

InvestorsObserver gives Sociedad Quimica y Minera de Chile (SQM) a strong valuation score of 69 from its analysis. The proprietary scoring system considers the underlying health of a company by analyzing its stock price, earnings, and growth rate. SQM currently holds a better value than 69% of stocks based on these metrics. Long term investors focused on buying-and-holding should find the valuation ranking system most relevant when making investment decisions.

Valuation Rank - 69
SQM gets a 69 Valuation Rank today. Find out what this means to you and get the rest of the rankings on SQM!

Metrics Analysis

SQM has a trailing twelve month Price to Earnings (PE) ratio of 32.8 which places it above the histroical average of roughly 15. SQM is currently trading at a poor value due to investors paying more than what the stock is worth in relation to its earnings. SQM's trailing-12-month earnings per share (EPS) of 1.55 does not justify its share price in the market. Trailing PE ratios don't factor in the company's projected growth rate, resulting in select firms having high PE ratios due to high growth potential enticing investors even when the underlying company has produced low earnings to date.

SQM currently has a 12-month-forward-PE-to-Growth (PEG) ratio of 1.9. The market is currently overvaluing SQM in relation to its projected growth due to the PEG ratio being above the fair market value of 1. SQM's PEG comes from its forward price to earnings ratio being divided by its growth rate. Due to the inclusion of more fundamentals of a company's overall health and a focus on the future rather than the past, PEG ratios are one of the most used valuation metrics by analysts today.

Summary

All together these valuation metrics paint a pretty poor picture for SQM at its current price due to a overvalued PEG ratio despite strong growth. The PE and PEG for SQM are worse than the average of the market resulting in a valuation score of 69.

Click Here to get the full Stock Score Report on Sociedad Quimica y Minera de Chile (SQM) Stock.

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