Head-To-Head Comparison: NewMarket (NYSE:NEU) vs. Avient (NYSE:AVNT)

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

Institutional & Insider Ownership

95.5% of Avient shares are held by institutional investors. Comparatively, 61.1% of NewMarket shares are held by institutional investors. 0.9% of Avient shares are held by company insiders. Comparatively, 8.6% of NewMarket shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Avient has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500. Comparatively, NewMarket has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500.

Valuation & Earnings

This table compares Avient and NewMarket”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Avient	$3.33 billion	1.14	$81.90 million	$1.85	22.35
NewMarket	$2.73 billion	3.02	$418.75 million	$46.48	19.28

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

Analyst Recommendations

This is a breakdown of recent ratings for Avient and NewMarket, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Avient	0	3	3	0	2.50
NewMarket	0	0	1	0	3.00

Avient currently has a consensus target price of $46.71, indicating a potential upside of 12.97%. Given Avient’s higher probable upside, analysts clearly believe Avient is more favorable than NewMarket.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Avient	5.10%	11.64%	4.67%
NewMarket	15.80%	24.62%	12.51%

Dividends

Avient pays an annual dividend of $1.10 per share and has a dividend yield of 2.7%. NewMarket pays an annual dividend of $12.00 per share and has a dividend yield of 1.3%. Avient pays out 59.5% of its earnings in the form of a dividend. NewMarket pays out 25.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Avient has raised its dividend for 1 consecutive years and NewMarket has raised its dividend for 7 consecutive years.

Summary

NewMarket beats Avient on 10 of the 17 factors compared between the two stocks.

About Avient

Avient Corporation operates as a formulator of material solutions in the United States, Canada, Mexico, Europe, South America, and Asia. It operates in two segments, Color, Additives and Inks; and Specialty Engineered Materials. The Color, Additives and Inks segment offers custom color and additive concentrates in solid and liquid form for thermoplastics, dispersions for thermosets, and specialty inks; custom-formulated liquid system, such as polyester, vinyl, natural rubber and latex, polyurethane, and silicone; and proprietary inks. Its products are used in medical and pharmaceutical devices, food packaging, personal care and cosmetics, transportation, building products, wire and cable, recreational and athletic apparel, construction and filtration, outdoor furniture, healthcare, textiles and appliances, and industrial markets. The Specialty Engineered Materials segment provides specialty polymer formulations, services, and solutions for designers, assemblers, and processors of thermoplastic materials. It sells its products through direct sales personnel, distributors, and commissioned sales agents. The company was formerly known as PolyOne Corporation and changed its name to Avient Corporation in June 2020. Avient Corporation was founded in 1885 and is headquartered in Avon Lake, Ohio.

About NewMarket

NewMarket Corporation, through its subsidiaries, primarily engages in the manufacture and sale of petroleum additives. The company offers lubricant additives for use in various vehicle and industrial applications, including engine oils, transmission fluids, off-road powertrain and hydraulic systems, gear oils, hydraulic oils, turbine oils, and other applications where metal-to-metal moving parts are utilized; engine oil additives designed for passenger cars, motorcycles, on and off-road heavy duty commercial equipment, locomotives, and engines in ocean-going vessels; driveline additives designed for products, such as transmission fluids, axle fluids, and off-road powertrain fluids; and industrial additives designed for products for industrial applications consisting of hydraulic fluids, grease, industrial gear fluids, and industrial specialty applications, such as turbine oils. It also provides fuel additives that are used to enhance the oil refining process and the performance of gasoline, diesel, biofuels, and other fuels to industry, government, original equipment manufacturers, and individual customers. In addition, the company engages in the marketing of antiknock compounds, as well as contracted manufacturing and services activities; and owns and manages a real property in Virginia. It operates in North America, Latin America, Asia Pacific, Europe, the Middle East, Africa, and India. NewMarket Corporation was founded in 1887 and is headquartered in Richmond, Virginia.