SQMSociedad Química y Minera de Chile S.A.
Is the business good?
The checks split: nothing decisive, though earnings fully cash-backed (1.7×).
Operating profit is fully backed by cash. Conversion is improving vs a year ago.
Positive operating leverage, operating profit is growing faster than sales, so margins widen as the business scales.
Margin-driven, fat margins on slower asset turns. ROE 13% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is SQM?
Sociedad Química y Minera de Chile S.A. earns 9.6% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 0.56 points above what the capital costs: growth creates value
- Operating margin
- 24%
Operating margin · Specialty Chemicals median 7.4% · fiscal year to FY2024
- Cash conversion
- 1.68×
Cash conversion · −0.09× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- 0.00%
Share count, year on year · flat: no meaningful dilution
| Year | Operating margin |
|---|---|
| FY2019 | 22% |
| FY2020 | 17% |
| FY2021 | 32% |
| FY2022 | 52% |
| FY2023 | 38% |
| FY2024 | 24% |
Details›
- Gross marginfiscal year to FY2024
- 29%
- Operating marginfiscal year to FY2024
- 24%
- Net marginfiscal year to FY2024
- 15%
- Free cash flow margin
- 6.7%
- Revenue, trailing twelve months
- $4.53B
- Free cash flow, trailing twelve months
- $303M
- Net income, trailing twelve months
- $685M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 9.6%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.