RelianceSQM

Reliance vs SQM

Reliance and SQM are examined here to compare business models, financial performance, and market context. The page presents a neutral, accessible overview of how the two companies operate and perform ...

Which Baskets Do They Appear In?

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The Domestic Advantage: Tariff-Resistant Industrials

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U.S. Protectionism: American Advantage

U.S. Protectionism: American Advantage

This carefully selected group of stocks represents companies set to benefit from the new 35% tariff on Canadian imports. Our professional analysts have identified these U.S. businesses as being uniquely positioned to capture greater market share and increase their pricing power as foreign competition becomes more expensive.

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Investment Analysis

Reliance

Pros

  • Reliance Steel & Aluminum Co. demonstrated record tons sold in Q2 2025 with a 4.0% year-over-year increase reflecting continued market share expansion.
  • The company improved gross profit margin sequentially to 30.4% in Q1 2025 due to pricing alignment and rising selling prices for carbon steel products.
  • Reliance maintains a strong balance sheet with $10.55 billion in assets and generated $64.5 million in operating cash flow in Q1 2025 despite seasonal working capital build.

Considerations

  • Earnings per share in Q3 2025 of $3.64 slightly missed analyst expectations, indicating some pressure on profitability.
  • The company expects a significant LIFO expense of $100 million in 2025 due to higher metal product costs, impacting income compared to prior estimates.
  • Reliance’s revenue growth is modest at 0.5% year-over-year, and earnings growth declined 5.4% year-over-year, showing some underlying operational challenges.
SQM

SQM

SQM

Pros

  • SQM is one of the world’s leading producers of lithium, potassium nitrate, and iodine, critical materials for electric vehicle batteries and agriculture.
  • The company benefits from strong demand in battery materials driven by global EV adoption and expanding renewable energy storage markets.
  • SQM has strategic exposure to Chile’s abundant mineral resources, providing cost advantages and scale in key growth markets.

Considerations

  • SQM faces regulatory risks and political uncertainty in Chile, which could impact mining operations and profitability.
  • The company’s profits are sensitive to commodity price volatility, especially lithium prices affected by global supply-demand imbalances.
  • Environmental and community concerns in mining regions pose ongoing operational risks and potential compliance costs.

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