One-glance verdict
Within fair range
$53.64 our estimate vs market $69.88
Wall Street consensus: $85.11 (58.7% higher than our fair-value estimate)
30% above our estimate
Fundamentals snapshot
Sociedad Química y Minera de Chile S.A.
SQM · NYQ · Basic Materials · Specialty Chemicals
Current price
$69.88
52-week range
$40.58 - $98.00
Market cap
$19.96B
Balance sheet
Watch
5.96x Adequate
Net debt $964.99M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 1.0% last year.
- Reward Returns 21.8% on equity, ahead of 80% of its peers.
- Risk Operating margin compressed from 52.0% to 48.8% over 3 years.
- Risk Insider ownership is only 0.0% (peer median: 0.6%).
What this company does
Sociedad Química y Minera de Chile S.A.
Sociedad Química y Minera de Chile (SQM) is a mining company that primarily sells lithium and specialty plant nutrients (custom fertilizers for farming). A large portion of its revenue comes from selling lithium, which is a key ingredient for the batteries used in electric cars, laptops, and phones. Because SQM is one of the world's largest producers of these essential materials, its business is closely tied to the global demand for both green technology and food.
How the company got here
Sociedad Química y Minera de Chile, or SQM, started in 1968 as a Chilean state-run company focused on producing nitrates, a key ingredient in fertilizers. It was fully nationalized (taken over by the government) in the 1970s before being privatized (sold to private investors) in the 1980s. A major turning point came in the 1990s when SQM began extracting lithium from the salt flats of the Atacama Desert, just as demand for batteries in electronics and electric vehicles started to grow. This move transformed it from a local fertilizer producer into a global supplier of critical materials for modern technology and agriculture.
What it actually does
SQM is a mining and chemical company that extracts natural resources, primarily from the deserts of northern Chile, and turns them into essential products for various industries. Think of them as a supplier of key ingredients for farmers, doctors, and technology companies. Their products help grow food, are used in medical imaging, and are essential for making the rechargeable batteries that power everything from your phone to electric cars. The company sells these specialized materials to customers in over 100 countries around the world.
Lithium and Derivatives
This is currently SQM's largest and most profitable business, making up a significant portion of the company's gross profit (the profit made on selling products before deducting administrative and other costs). The company extracts lithium-rich brine (salty water) from beneath the Atacama Desert and processes it into high-purity lithium carbonate and lithium hydroxide. These are critical materials sold to battery manufacturers, who use them to make the rechargeable batteries needed for electric vehicles, smartphones, and energy storage systems.
Specialty Plant Nutrition
This segment is SQM's original business and focuses on high-end fertilizers. Instead of basic fertilizers, they produce specialized nutrients, like potassium nitrate, that help farmers grow high-value crops like fruits and vegetables more efficiently. Farmers and agricultural businesses pay for these products to increase their crop yield (the amount of crop they can grow) and quality, which in turn increases their profitability.
Iodine and Derivatives
SQM is the world's largest producer of iodine, which it gets from the same mineral deposits in northern Chile where it finds nitrates. This part of the business sells iodine and related products to a wide range of industries. Its most important customers are in the healthcare sector, where iodine is a key component for X-ray contrast media (the dye that makes your insides visible in a CT scan), as well as for antiseptics and pharmaceuticals.
Potassium
This business line produces different forms of potassium, mainly potassium chloride and potassium sulfate. These products are primarily sold as commodity fertilizers, which are more basic and widely used than the company's specialty plant nutrients. Potassium is a vital nutrient for plant growth, helping crops become more resistant to drought and improving the health and shelf life of fruits and vegetables. SQM is unique in that it produces all three major types of potassium-based fertilizers.
Industrial Chemicals
This is a smaller but steady part of SQM's business that sells nitrates for non-agricultural uses. Customers in this segment include companies that manufacture glass, ceramics, and explosives for construction and mining. A growing area for this business is producing solar salts, which are used in solar thermal power plants to store heat and generate electricity even when the sun isn't shining.
What management is betting on now
Management's main focus is on the massive global shift toward electric vehicles, which has created huge demand for lithium. The company is heavily investing in expanding its lithium production capacity, both in Chile and through new projects in other countries like Australia. They are also entering a major partnership with Codelco, Chile's state-owned copper company, to ensure long-term lithium production. At the same time, SQM is emphasizing sustainability, aiming to reduce its water usage and achieve carbon neutrality (balancing carbon emissions with carbon removal) in its lithium production to appeal to environmentally conscious customers.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $53.64 vs current price $69.88
Wall Street consensus is the average analyst price target: $85.11 (58.7% higher than our fair-value estimate).
Our most-likely fair value is $53.64 a share — about 23.2% away from today's price of $69.88, so the stock currently looks fairly priced.
Is it drowning in debt?
Watch
Net debt $965.0M. Interest coverage 6.0x.
Net debt
$964.99M
Interest coverage
5.96x
Sociedad Química y Minera de Chile S.A.'s profit covers its interest bill about 6.0 times over. which is stronger than every peer shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Watch
Worse cushion
Baseline
Better cushion
SQM
BASELINE
Sociedad Química y Minera de Chile S.A.
Total debt $5.31B Interest coverage 5.96x This is the baseline the peer rows are being compared against.
Total debt $2.00B Interest coverage 0.32x -95% vs SQM Carries about 18.4x less debt cushion than SQM.
Total debt $6.08B Interest coverage 4.47x -25% vs SQM Carries about 1.3x less debt cushion than SQM.
Total debt $3.30B Interest coverage 4.65x -22% vs SQM Carries about 1.3x less debt cushion than SQM.
Total debt $4.40B Interest coverage 1.39x -77% vs SQM Carries about 4.3x less debt cushion than SQM.
What you should know
The case for and against SQM
3 Rewards
2 Risks
Rewards
-
Revenue grew 1.0% last year.
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Returns 21.8% on equity, ahead of 80% of its peers.
-
Free cash flow was positive in 3/10 years.
Risks
-
Operating margin compressed from 52.0% to 48.8% over 3 years.
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Insider ownership is only 0.0% (peer median: 0.6%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
14.93x
Forward P/E
10.40x
P/B
3.16x
P/S
2.97x
EV/EBITDA
7.75x
PEG ratio
0.35x
Profitability
How much profit each dollar creates
Gross margin
42.2%
Operating margin
48.8%
Net margin
20.6%
ROE
21.8%
ROA
11.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.61x
Current ratio
2.60x
Quick ratio
1.90x
Total debt
$5.31B
Total cash
$4.35B
Growth
How the business has been compounding
Revenue TTM
$6.73B
Revenue 5Y CAGR
-24.7%
EPS TTM
4.68
EPS 5Y CAGR
-46.8%
Cash flow
How much cash the business throws off
Operating CF TTM
—
Free CF TTM
$437.69M
FCF margin
6.5%
Dividend
Shareholder payout
Yield
3.4%
Payout ratio
21.2%
Last ex-div date
2026-09-08