SQM

We rate CHEMICAL & MINING CO OF CHILE INC (SQM) as a Hold with a composite score of 61.1/100 at a current price of $76.98. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in value (76th percentile) and quality (70th percentile), which together account for the majority of the composite score. All factors score above the 40th percentile, indicating no material weakness in the quantitative profile. We assign a Narrow Moat rating (45/100), Medium uncertainty, and Exemplary capital allocation.

Key items to watch: whether strong momentum is fundamentally supported by revenue trends. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

CHEMICAL & MINING CO OF CHILE INC holds a lower-quartile position (#50 of 50) within the Mining sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 61.1/100 places it at rank #591 in our full 7,333-stock universe. With a $10.4B market capitalization, CHEMICAL & MINING CO OF CHILE INC operates at meaningful scale within the Mining sector, providing competitive advantages in distribution, procurement, and customer reach.

Despite positive momentum (62th percentile), revenue contraction of -39% creates a divergence between price action and fundamental trajectory. This divergence suggests either that the market is looking through near-term weakness or that technical factors are temporarily inflating the stock. Investors should assess whether the revenue decline reflects cyclical weakness or structural challenges.

The margin cascade tells an important story: gross margins of 29% (-13.9pp vs sector) narrow to operating margins of 24% (+11.3pp vs sector) and net margins of 15.3%, yielding a gross-to-net conversion rate of 52%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $76.98, CHEMICAL & MINING CO OF CHILE INC appears undervalued relative to its fundamentals. Our value factor score of 76/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at a P/E of 30.5x (a 122% premium to the sector median of 13.7x), EV/EBITDA of 5.6x (near the sector median), P/B of 4.0x, P/S of 1.1x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.

We assign a Medium uncertainty rating to CHEMICAL & MINING CO OF CHILE INC. The stock presents a balanced risk profile: risk factors are within normal ranges. While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

We identify no major risk factors at this time. The company's stability factor sits at the 58th percentile with quality at the 70th percentile, both of which support our low-risk assessment. The absence of material leverage, profitability, or volatility concerns reduces the likelihood of a permanent capital loss scenario.

Key risk mitigants include: a 5.78% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate CHEMICAL & MINING CO OF CHILE INC's capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 53.6%, a 5.78% dividend yield, best-in-class net margins of 15.3%. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — CHEMICAL & MINING CO OF CHILE INC meets this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. The company returns capital via a 5.78% dividend yield, and the combination of 24.1% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, CHEMICAL & MINING CO OF CHILE INC receives a Hold rating with a composite score of 61.1/100 (rank #591 of 7,333). Our quantitative framework assigns a Narrow Moat (45/100, trend: stable), Medium uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 63/100.

Our analysis supports a neutral stance on CHEMICAL & MINING CO OF CHILE INC. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.