Should I Buy Sociedad Química y Minera de Chile (SQM)? Finance YouTuber Analysis

The analyst favors SQM as a lithium play due to its current production and profitability, with lithium accounting for a significant portion of its gross profit. Despite lower lithium prices impacting revenue, the company's diverse assets and strong earnings per share make its shares attractive at under six times P/E, offering a solid dividend yield. The main concern is Chile's potential nationalization of assets by 2030.

“This is one of my favorite lithium plays right now it's further along than the others and pays that dividend.”

The YouTuber highlights SQM as a significant player in the lithium market, holding a 19% market share and targeting increased capacity. While not a pure-play, its diversification into specialty plant nutrients and impressive recent growth in lithium revenue make it appealing. The company's production profile, similar to Albemarle, with exposure to both Australian and Chilean resources, adds to its strength.

“SQM booked a year-over-year growth of 94 percent in lithium revenue and 46 growth across the company. Now gross profit nearly doubled and is continuing higher prices for lithium should keep those sales growing.”