Head to Head Survey: Sociedad Quimica y Minera (NYSE:SQM) & Orion (NYSE:OEC)

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for Orion and Sociedad Quimica y Minera, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orion	3	2	0	0	1.40
Sociedad Quimica y Minera	1	7	5	1	2.43

Orion presently has a consensus target price of $5.75, suggesting a potential downside of 26.05%. Sociedad Quimica y Minera has a consensus target price of $71.42, suggesting a potential downside of 20.40%. Given Sociedad Quimica y Minera’s stronger consensus rating and higher probable upside, analysts clearly believe Sociedad Quimica y Minera is more favorable than Orion.

Dividends

Orion pays an annual dividend of $0.08 per share and has a dividend yield of 1.0%. Sociedad Quimica y Minera pays an annual dividend of $0.12 per share and has a dividend yield of 0.1%. Orion pays out -6.3% of its earnings in the form of a dividend. Sociedad Quimica y Minera pays out 5.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Orion is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Orion	-3.88%	6.52%	1.42%
Sociedad Quimica y Minera	12.85%	9.69%	4.78%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orion	$1.81 billion	0.24	-$70.10 million	($1.26)	-6.17
Sociedad Quimica y Minera	$4.58 billion	5.60	$588.14 million	$2.05	43.76

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

Insider and Institutional Ownership

94.3% of Orion shares are held by institutional investors. Comparatively, 12.4% of Sociedad Quimica y Minera shares are held by institutional investors. 3.1% of Orion shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Orion has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, Sociedad Quimica y Minera has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.

Summary

Sociedad Quimica y Minera beats Orion on 13 of the 17 factors compared between the two stocks.

About Orion

Orion S.A., together with its subsidiaries, engages in the manufacture and sale of carbon black products. It operates in two segments, Specialty Carbon Black and Rubber Carbon Black. The company offers post-treated specialty carbon black grades for coatings and printing applications; high purity carbon black grades for the fiber industry; and conductive carbon black grades for batteries, polymers, and coatings. It also provides rubber carbon black products for applications in mechanical rubber goods, as well as in tires under the ECORAX brand name; and acetylene-based conductive additives for lithium-ion batteries and other applications. It operates in the United States, Brazil, rest of the Americas, Germany, South Africa, Italy, Spain, Turkey, France, Rest of EMEA, China, the Republic of Korea, and rest of Asia. The company was formerly known as Orion Engineered Carbons S.A. and changed its name to Orion S.A. in June 2023. Orion S.A. was founded in 1862 and is headquartered in Senningerberg, Luxembourg.

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.