• 
• See all for Emerging Money
• View Print Version

• Emerging Money
• Emerging Money Commodities
• Emerging Money Latin America

Chemical & Mining Company of Chile ( SQM , quote ) is ideal for value investing. The business is expected to profit from increased demand for lithium batteries  and from overall growth in Latin America .

With a profit margin of 27.05%, Chemical & Mining compares very favorably with such heavyweights as Dow Chemical Company ( DOW , quote ), with a profit margin of only 3.84%.

In value investing everything flows from profits. If a company does not make money, eventually it will go out of business (at least, it should). As legendary investment banker André Meyer noted, it is unheard-of for a profitable company to go broke.

Chemical & Mining's high profit margin leads to many other appealing financial data points for the purposes of value investing. The return on equity is 31.65%, compared with about 15% for the average member of the Standard & Poor's 500 Index. ROE is a very important measure, as it reveals what investors are earning from their equity in a company.

The return on assets for Chemical & Mining is 15.68%. By contrast, Dow Chemical's ROA is only 3.27%. The Chilean company's operating margin of 35.87% is also superior.

Earnings-per-share growth is in a very bullish trend for Chemical & Mining. Over the past five years it has averaged 15.52%. On a quarterly basis, it is up by 35.71%. It is even better for the year, up 42.82%. That's a very positive trend for value investing.

Now trading at about $59.50 a share, Chemical & Mining has a mean analyst target price for the next year of $62.81. The dividend yield of 1.72% adds to that: with the high profit margin, there is plenty of cash to raise the dividend. Also bullish is the below-average beta, which studies have shown results in higher return, not to mention the low short float of just 0.47%.

The trend is positive for shareholders, with SQM trading above the 20-, 50- and 200-day moving averages.

Related International Articles

• 
  The Week Ahead: Tiffany, Avago Technologies and The Fresh Market Report Earnings; Key Economic Data on Tap
  5/24/2013 08:38 PM
• 
  Weekly Economic Review (May 20 - May 24, 2013)
  5/24/2013 04:12 PM
• 
  EM vs. SPY – Key level coming.
  5/24/2013 12:12 PM