Critical Analysis: NewMarket Corporation (NEU) vs. Its Rivals
NewMarket Corporation (NYSE: NEU) is one of 34 publicly-traded companies in the “Commodity Chemicals” industry, but how does it compare to its rivals? We will compare NewMarket Corporation to related companies based on the strength of its dividends, institutional ownership, profitability, earnings, analyst recommendations, valuation and risk.
Insider and Institutional Ownership
55.3% of NewMarket Corporation shares are owned by institutional investors. Comparatively, 69.0% of shares of all “Commodity Chemicals” companies are owned by institutional investors. 16.8% of NewMarket Corporation shares are owned by company insiders. Comparatively, 8.2% of shares of all “Commodity Chemicals” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Risk and Volatility
NewMarket Corporation has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500. Comparatively, NewMarket Corporation’s rivals have a beta of 1.17, suggesting that their average share price is 17% more volatile than the S&P 500.
NewMarket Corporation pays an annual dividend of $7.00 per share and has a dividend yield of 1.6%. NewMarket Corporation pays out 34.0% of its earnings in the form of a dividend. As a group, “Commodity Chemicals” companies pay a dividend yield of 1.8% and pay out 62.9% of their earnings in the form of a dividend. NewMarket Corporation has raised its dividend for 8 consecutive years.
This is a summary of current recommendations for NewMarket Corporation and its rivals, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|NewMarket Corporation Competitors||98||751||1135||32||2.55|
As a group, “Commodity Chemicals” companies have a potential downside of 2.87%. Given NewMarket Corporation’s rivals higher possible upside, analysts plainly believe NewMarket Corporation has less favorable growth aspects than its rivals.
Valuation & Earnings
This table compares NewMarket Corporation and its rivals gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|NewMarket Corporation||$2.11 billion||$402.53 million||21.02|
|NewMarket Corporation Competitors||$4.15 billion||$892.82 million||34.29|
NewMarket Corporation’s rivals have higher revenue and earnings than NewMarket Corporation. NewMarket Corporation is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.
This table compares NewMarket Corporation and its rivals’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|NewMarket Corporation Competitors||-29.86%||24.06%||5.26%|
NewMarket Corporation rivals beat NewMarket Corporation on 7 of the 12 factors compared.
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.
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