Contrasting Sociedad Quimica y Minera (NYSE:SQM) & Westaim (OTCMKTS:WEDXF)

Sociedad Quimica y Minera (NYSE:SQM) and Westaim (OTCMKTS:WEDXF) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.

Institutional and Insider Ownership

12.4% of Sociedad Quimica y Minera shares are owned by institutional investors. 4.2% of Westaim shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Sociedad Quimica y Minera and Westaim’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%
Westaim	-108.56%	-9.68%	-7.67%

Valuation and Earnings

This table compares Sociedad Quimica y Minera and Westaim”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sociedad Quimica y Minera	$4.58 billion	4.53	$588.14 million	$2.85	25.48
Westaim	$53.37 million	10.11	-$38.00 million	($1.92)	-8.45

Sociedad Quimica y Minera has higher revenue and earnings than Westaim. Westaim 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.

Analyst Recommendations

This is a breakdown of recent ratings for Sociedad Quimica y Minera and Westaim, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sociedad Quimica y Minera	1	8	5	1	2.40
Westaim	0	0	0	0	0.00

Sociedad Quimica y Minera currently has a consensus target price of $75.50, indicating a potential upside of 3.95%. Given Sociedad Quimica y Minera’s stronger consensus rating and higher probable upside, analysts plainly believe Sociedad Quimica y Minera is more favorable than Westaim.

Risk & Volatility

Sociedad Quimica y Minera has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, Westaim has a beta of 0.21, suggesting that its share price is 79% less volatile than the S&P 500.

Summary

Sociedad Quimica y Minera beats Westaim on 13 of the 15 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 Westaim

The Westaim Corporation is a private equity firm specializing in direct and indirect investments through acquisitions, joint ventures, secondary investments both direct and indirect, fund of fund investments, and other arrangements. For direct investments, the firm invests in early venture, mid venture, late venture, middle market, later stage, mature, emerging growth, PIPEs, and buyout transactions. For fund of fund investments, it seeks to invest in private equity funds, venture capital funds, and hedge funds. The firm seeks to provide long term capital to businesses operating in the global financial services industry. It typically acquires controlling interests in businesses. The firm seeks to acquire debt, equity, or derivative securities of both public and private companies. It invests with the objective of providing its shareholders with capital appreciation and real wealth preservation. The firm seeks to provide its portfolio companies with advisory services including, but not limited to, advice on capital allocation, financing strategy, performance measurement and merger and acquisition support. It also seeks to partner with like-minded providers of third party capital to help supplement the firm's own capital, when completing acquisitions. The firm generally seeks to hold its investments for seven to 15 years. The Westaim Corporation was founded in 1996 and is based in Toronto, Canada.