NewMarket Corporation (NYSE: NEU) and Olin Corporation (NYSE:OLN) are both mid-cap basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, dividends, risk, institutional ownership, profitability, analyst recommendations and valuation.

Dividends

NewMarket Corporation pays an annual dividend of $7.00 per share and has a dividend yield of 1.7%. Olin Corporation pays an annual dividend of $0.80 per share and has a dividend yield of 2.5%. NewMarket Corporation pays out 34.0% of its earnings in the form of a dividend. Olin Corporation pays out 320.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NewMarket Corporation has raised its dividend for 8 consecutive years.

Analyst Ratings

This is a summary of recent recommendations and price targets for NewMarket Corporation and Olin Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NewMarket Corporation 0 1 0 0 2.00
Olin Corporation 0 2 4 0 2.67

Olin Corporation has a consensus target price of $32.67, suggesting a potential upside of 1.35%. Given Olin Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe Olin Corporation is more favorable than NewMarket Corporation.

Volatility and Risk

NewMarket Corporation has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500. Comparatively, Olin Corporation has a beta of 1.43, suggesting that its share price is 43% more volatile than the S&P 500.

Insider and Institutional Ownership

55.5% of NewMarket Corporation shares are held by institutional investors. Comparatively, 92.6% of Olin Corporation shares are held by institutional investors. 16.8% of NewMarket Corporation shares are held by insiders. Comparatively, 2.9% of Olin Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares NewMarket Corporation and Olin Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NewMarket Corporation 11.57% 46.94% 16.19%
Olin Corporation 0.72% 5.80% 1.51%

Valuation & Earnings

This table compares NewMarket Corporation and Olin Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NewMarket Corporation $2.11 billion 2.35 $402.53 million $20.57 20.35
Olin Corporation $5.93 billion 0.90 $842.90 million $0.25 128.92

Olin Corporation has higher revenue and earnings than NewMarket Corporation. NewMarket Corporation is trading at a lower price-to-earnings ratio than Olin Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Olin Corporation beats NewMarket Corporation on 9 of the 17 factors compared between the two stocks.

NewMarket Corporation Company Profile

NewMarket Corporation is a holding company. The Company is the parent company of Afton Chemical Corporation (Afton), Ethyl Corporation (Ethyl), NewMarket Services Corporation (NewMarket Services), and NewMarket Development Corporation (NewMarket Development). The Company operates through petroleum additives segment, which is primarily represented by Afton. The Company manufactures chemical components that are selected to perform one or more specific functions and combine those chemicals with other chemicals or components to form additive packages for use in specified end user applications. The petroleum additives product applications include lubricant additives and fuel additives. The Company’s All other category includes the operations of the TEL business, as well as contract manufacturing and services performed by Ethyl. The Ethyl plant facility is located in Houston, Texas. It is involved in terminal operations related to TEL and other fuel additives.

Olin Corporation Company Profile

Olin Corporation is a manufacturer and distributor of chemical products, and ammunition. The Company operates through three segments: Chlor Alkali Products and Vinyls, Epoxy and Winchester. The Chlor Alkali Products and Vinyls segment manufactures and sells chlorine and caustic soda, ethylene dichloride and vinyl chloride monomer, methyl chloride, methylene chloride, chloroform, carbon tetrachloride, perchloroethylene, trichloroethylene and vinylidene chloride, hydrochloric acid, hydrogen, bleach products and potassium hydroxide. The Epoxy segment produces and sells a range of epoxy materials, including allyl chloride, epichlorohydrin, liquid epoxy resins and downstream products, such as converted epoxy resins and additives. The Winchester segment produces and sells sporting ammunition, reloading components, small caliber military ammunition and components, and industrial cartridges.

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