Kuraray (OTCMKTS:KURRY) and Sociedad Quimica y Minera (NYSE:SQM) Financial Analysis

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Kuraray	0.92%	5.37%	3.08%
Sociedad Quimica y Minera	20.62%	18.20%	9.46%

Volatility and Risk

Kuraray has a beta of 0.03, indicating that its share price is 97% less volatile than the S&P 500. Comparatively, Sociedad Quimica y Minera has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500.

Insider and Institutional Ownership

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

Dividends

Kuraray pays an annual dividend of $0.85 per share and has a dividend yield of 2.6%. Sociedad Quimica y Minera pays an annual dividend of $1.69 per share and has a dividend yield of 2.6%. Kuraray pays out 160.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sociedad Quimica y Minera pays out 34.8% of its earnings in the form of a dividend. Sociedad Quimica y Minera is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current recommendations for Kuraray and Sociedad Quimica y Minera, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kuraray	1	0	0	0	1.00
Sociedad Quimica y Minera	1	5	6	1	2.54

Sociedad Quimica y Minera has a consensus price target of $82.56, suggesting a potential upside of 29.07%. Given Sociedad Quimica y Minera’s stronger consensus rating and higher possible upside, analysts plainly believe Sociedad Quimica y Minera is more favorable than Kuraray.

Valuation & Earnings

This table compares Kuraray and Sociedad Quimica y Minera”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kuraray	$5.41 billion	0.61	$50.04 million	$0.53	62.16
Sociedad Quimica y Minera	$4.58 billion	3.99	$588.14 million	$4.85	13.19

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

Summary

Sociedad Quimica y Minera beats Kuraray on 14 of the 16 factors compared between the two stocks.

About Kuraray

Kuraray Co., Ltd. engages in the production and sale of resins, chemicals, fibers, activated carbon, and high-performance membranes and systems worldwide. The Vinyl Acetate segment manufactures and markets functional resins and films, including PVA, PVB and EVAL. The Isoprene segment engages in the manufacture and marketing of SEPTON thermoplastic elastomer, isoprene-related products, and GENESTAR. The Functional Materials segment manufactures and markets methacrylic resin, medical products, and carbon materials. The Fibers and Textiles segment manufactures and sells synthetic fibers and textiles, CLARINO manmade leather, non-woven fabrics, and other products. The Trading segment mainly processes and sells synthetic fibers and manmade leathers. It is also involved in the engineering business; design and construction of various plants; outsourcing of logistics services; temporary staffing/introduction business; design, manufacture, construction, and sale of water treatment equipment; travel and insurance agency business; golf course management; management of accommodation facilities and restaurants; manufacture and sale of hook-and loop fasteners and related products; manufacture and sale of dental materials; warehousing and logistics; and manufacturing and sales of methacrylic resin sheets, as well as provides consulting services. The company was incorporated in 1926 and is headquartered in Tokyo, Japan.

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.