Reviewing Sociedad Quimica y Minera (NYSE:SQM) and International Flavors & Fragrances (NYSE:IFF)

Sociedad Quimica y Minera (NYSE:SQM) and International Flavors & Fragrances (NYSE:IFF) are both large-cap basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, analyst recommendations, profitability, institutional ownership and valuation.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Sociedad Quimica y Minera and International Flavors & Fragrances, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sociedad Quimica y Minera	1	7	3	0	2.18
International Flavors & Fragrances	2	4	12	0	2.56

Sociedad Quimica y Minera presently has a consensus target price of $46.81, indicating a potential downside of 13.94%. International Flavors & Fragrances has a consensus target price of $85.02, indicating a potential upside of 29.06%. Given International Flavors & Fragrances’ stronger consensus rating and higher possible upside, analysts clearly believe International Flavors & Fragrances is more favorable than Sociedad Quimica y Minera.

Profitability

This table compares Sociedad Quimica y Minera and International Flavors & Fragrances’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sociedad Quimica y Minera	11.29%	9.09%	4.17%
International Flavors & Fragrances	-3.48%	7.95%	3.97%

Insider & Institutional Ownership

12.4% of Sociedad Quimica y Minera shares are held by institutional investors. Comparatively, 96.0% of International Flavors & Fragrances shares are held by institutional investors. 0.2% of International Flavors & Fragrances shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Sociedad Quimica y Minera pays an annual dividend of $0.14 per share and has a dividend yield of 0.3%. International Flavors & Fragrances pays an annual dividend of $1.60 per share and has a dividend yield of 2.4%. Sociedad Quimica y Minera pays out 8.4% of its earnings in the form of a dividend. International Flavors & Fragrances pays out -98.8% 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. International Flavors & Fragrances is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Sociedad Quimica y Minera and International Flavors & Fragrances”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sociedad Quimica y Minera	$4.23 billion	3.67	$685.12 million	$1.67	32.57
International Flavors & Fragrances	$11.07 billion	1.52	$243.00 million	($1.62)	-40.66

Sociedad Quimica y Minera has higher earnings, but lower revenue than International Flavors & Fragrances. International Flavors & Fragrances 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.

Volatility & Risk

Sociedad Quimica y Minera has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500. Comparatively, International Flavors & Fragrances has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500.

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 International Flavors & Fragrances

International Flavors & Fragrances, Inc. engages in the manufacture and supply of flavors and fragrances used in the food, beverage, personal care, and household products industries. It operates through the following segments: Nourish, Health & Biosciences, Scent and Pharma Solutions. The Nourish segment consists of legacy Taste segment combined with N&B’s Food & Beverage division and the food protection business of N&B’s Health & Biosciences division. The Health & Biosciences business consists of a biotechnology-driven portfolio of enzymes, food cultures, probiotics and specialty ingredients for food, home and personal care, and health and wellness applications. The Scent business creates fragrance compounds, fragrance ingredients and cosmetic ingredients that are integral elements in the world’s finest perfumes and best-known household and personal care products. The Pharma Solutions business produces a vast portfolio including cellulosics and seaweed-based pharma excipients, used to improve the functionality and delivery of active pharmaceutical ingredients, including controlled or modified drug release formulations, and enabling. The company was founded in 1833 and is headquartered in New York, NY.