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MOS or SQM: Which Is the Better Value Stock Right Now?

Zacks Equity Research
·2-min read

Investors with an interest in Fertilizers stocks have likely encountered both Mosaic (MOS) and SQM (SQM). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Mosaic and SQM are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. This means that MOS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

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The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

MOS currently has a forward P/E ratio of 12.24, while SQM has a forward P/E of 47.18. We also note that MOS has a PEG ratio of 1.75. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SQM currently has a PEG ratio of 2.47.

Another notable valuation metric for MOS is its P/B ratio of 1.21. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, SQM has a P/B of 6.38.

These are just a few of the metrics contributing to MOS's Value grade of B and SQM's Value grade of F.

MOS has seen stronger estimate revision activity and sports more attractive valuation metrics than SQM, so it seems like value investors will conclude that MOS is the superior option right now.


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The Mosaic Company (MOS) : Free Stock Analysis Report
 
Sociedad Quimica y Minera S.A. (SQM) : Free Stock Analysis Report
 
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