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Here's Why You Should Buy Sociedad Quimica (SQM) Stock Right Now

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·4 min read
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Sociedad Quimica y Minera de Chile S.A.’s SQM stock looks promising at the moment. The company’s shares have soared roughly 80% over the past six months. It is benefiting from higher prices across its business lines and healthy demand.

We are positive on the company’s prospects and believe that the time is right for you to add the stock to the portfolio as it looks promising and is poised to carry the momentum ahead.

Sociedad Quimica carries a Zacks Rank #1 (Strong Buy) and a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 or 2 (Buy), offer the best investment opportunities for investors.

Let’s take a look into the factors that make Sociedad Quimica an attractive choice for investors right now.

Price Performance

Shares of Sociedad Quimica have surged 93.9% over the past year against the 46.2% rise of its industry. It has also outperformed the S&P 500’s roughly 11.3% decline over the same period.

 

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Zacks Investment Research


Image Source: Zacks Investment Research

 

Estimates Northbound

Over the past two months, the Zacks Consensus Estimate for Sociedad Quimica for 2022 has increased around 55%. The consensus estimate for second-quarter 2022 has also been revised roughly 95% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.

Solid Growth Prospects

The Zacks Consensus Estimate for earnings for 2022 for Sociedad Quimica is currently pegged at $9.49, reflecting an expected year-over-year growth of 362.9%. Earnings are also expected to register a 787.1% growth in second-quarter 2022.

Upbeat Prospects

Sociedad Quimica is benefiting from being the low-cost producer of potassium chloride, potassium sulfate and potassium nitrate. Higher realized prices and strong demand are driving its results as witnessed in the first quarter of 2022.

Revenues from the company’s Lithium and Derivatives segment surged more than tenfold year over year in the first quarter, driven by strong lithium sales volumes and prices. The Specialty Plant Nutrients segment also saw a 42% increase in sales in the quarter on the back of higher prices.

Sociedad Quimica is gaining from favorable trends in the lithium market underpinned by strong electric vehicle sales. The expansion of lithium operations is also supporting the company’s lithium sales volumes. Strong demand and limited supply are also boosting lithium prices. The company envisions global lithium market to growth at least 30% in 2022. It expects sales volumes to exceed 140,000 metric tons this year.

Iodine volumes are also being supported by growing demand following the post-pandemic recovery. The company also expects iodine prices to continue to rise in the coming quarters. Global potassium prices are also have been driven by the shortage of potassium-based fertilizers. This is driving prices in the company’s potassium business lines.

 

Sociedad Quimica y Minera S.A. Price and Consensus

 

Sociedad Quimica y Minera S.A. Price and Consensus
Sociedad Quimica y Minera S.A. Price and Consensus

Sociedad Quimica y Minera S.A. price-consensus-chart | Sociedad Quimica y Minera S.A. Quote

 

Stocks to Consider

Other top-ranked stocks worth considering in the basic materials space include Nutrien Ltd. NTR, Albemarle Corporation ALB and Cabot Corporation CBT.

Nutrien, sporting a Zacks Rank #1, has an expected earnings growth rate of 174.6% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 22.9% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 5.8%, on average. NTR has rallied roughly 42% in a year.

Albemarle has a projected earnings growth rate of 231.7% for the current year. The Zacks Consensus Estimate for ALB’s current-year earnings has been revised 116.1% upward in the past 60 days.

Albemarle’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 22.5%. ALB has rallied roughly 30% in a year. The company flaunts a Zacks Rank #1.

Cabot, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 22.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 6% upward in the past 60 days.

Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 9% over a year.


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