NYSE:NEU

Stock Analysis Report

Executive Summary

NewMarket Corporation, through its subsidiaries, engages in the petroleum additives businesses.

Snowflake

Fundamentals

Average dividend payer with acceptable track record.


Similar Companies

Share Price & News

How has NewMarket's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-1.0%

NEU

2.0%

US Chemicals

1.0%

US Market


1 Year Return

23.6%

NEU

-5.9%

US Chemicals

6.7%

US Market

Return vs Industry: NEU exceeded the US Chemicals industry which returned -5.9% over the past year.

Return vs Market: NEU exceeded the US Market which returned 6.7% over the past year.


Share holder returns

NEUIndustryMarket
7 Day-1.0%2.0%1.0%
30 Day1.9%-2.8%-1.8%
90 Day10.4%-2.6%-1.8%
1 Year25.7%23.6%8.1%-5.9%9.1%6.7%
3 Year20.6%14.7%43.4%17.3%46.1%36.6%
5 Year33.8%23.6%46.1%14.8%66.9%48.6%

Price Volatility Vs. Market

How volatile is NewMarket's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is NewMarket undervalued based on future cash flows and its price relative to the stock market?

46%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Undervalued: NEU ($464.78) is trading below our estimate of fair value ($858.03)

Significantly Undervalued: NEU is trading below fair value by more than 20%.


Price Based on Earnings

PE vs Industry: NEU is poor value based on its PE Ratio (20.3x) compared to the Chemicals industry average (19.4x).

PE vs Market: NEU is poor value based on its PE Ratio (20.3x) compared to the US market (17.5x).


Price Based on Expected Growth

Low PEG Ratio: NEU is poor value based on its PEG Ratio (2.6x)


Price Based on Value of Assets

PB vs Industry: NEU is overvalued based on its PB Ratio (8.8x) compared to the US Chemicals industry average (2x).


Next Steps

Future Growth

How is NewMarket expected to perform in the next 1 to 3 years based on estimates from 1 analyst?

7.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: NEU's forecast earnings growth (7.9% per year) is above the savings rate (2.7%).

Earnings vs Market: NEU's earnings (7.9% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: NEU's earnings are forecast to grow, but not significantly.

Revenue vs Market: NEU's revenue (0.9% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: NEU's revenue (0.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Estimates


Future Return on Equity

High Future ROE: Insufficient data to determine if NEU's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has NewMarket performed over the past 5 years?

-2.2%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: NEU's earnings have declined by -2.2% per year over the past 5 years.

Accelerating Growth: NEU's earnings growth over the past year (45.3%) exceeds its 5-year average (-2.2% per year).

Earnings vs Industry: NEU earnings growth over the past year (45.3%) exceeded the Chemicals industry -2%.


Return on Equity

High ROE: Whilst NEU's Return on Equity (43.73%) is outstanding, this metric is skewed due to their high level of debt.


Return on Assets

ROA vs Industry: NEU has a higher Return on Assets than the Chemicals industry average last year.


Return on Capital Employed

ROCE Improving: NEU's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is NewMarket's financial position?


Financial Position Analysis

Short Term Liabilities: NEU's short term assets ($829.4M) exceeds its short term liabilities ($283.5M)

Long Term Liabilities: NEU's short term assets (829.4M) do not cover its long term liabilities (894.3M)


Debt to Equity History and Analysis

Debt Level: NEU's debt to equity ratio (115.2%) is considered high

Reducing Debt: NEU's debt to equity ratio has increased from 73.5% to 115.2% over the past 5 years.

Debt Coverage: NEU's debt is well covered by operating cash flow (41.7%).

Interest Coverage: NEU's interest payments on its debt are well covered by EBIT (10.9x coverage).


Balance Sheet

Inventory Level: NEU has a high level of physical assets or inventory.

Debt Coverage by Assets: NEU's debt is covered by short term assets (assets are 1.221900x debt).


Next Steps

Dividend

What is NewMarket's current dividend yield, its reliability and sustainability?

1.51%

Expected Dividend Yield


Dividend Yield vs Market

company1.6%marketbottom25%1.5%markettop25%3.8%industryaverage2.1%forecastin3Years1.5%

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: NEU's dividend (1.64%) is higher than the bottom 25% of dividend payers in the US market (1.46%).

High Dividend: NEU's dividend (1.64%) is low compared to the top 25% of dividend payers in the US market (3.77%).

Stable Dividend: NEU's dividends per share have been stable in the past 10 years.

Growing Dividend: NEU's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (30.6%), NEU's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of NewMarket's salary, the management and board of directors tenure and is there insider trading?

5.6yrs

Average management tenure


CEO

Teddy Gottwald (58yo)

15.6yrs

Tenure

US$2,102,180

Compensation

Mr. Thomas E. Gottwald, also known as Teddy, has been the Chief Executive Officer and President at NewMarket Corporation since March 3, 2004 and serves as its Chairman of the Board since July 29, 2014. Mr. ...


CEO Compensation Analysis

Compensation vs. Market: Teddy's total compensation ($USD2.10M) is about average for companies of similar size in the US market ($USD6.81M).

Compensation vs Earnings: Teddy's compensation has been consistent with company performance over the past year.


Management Age and Tenure

5.6yrs

Average Tenure

58yo

Average Age

Experienced Management: NEU's management team is seasoned and experienced (5.6 years average tenure).


Board Age and Tenure

12.9yrs

Average Tenure

72yo

Average Age

Experienced Board: NEU's board of directors are seasoned and experienced ( 12.9 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$4,816,24625 Feb 19
Thomas Gottwald
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares11,000
Max PriceUS$441.30
SellUS$216,98414 Feb 19
James Rogers
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares500
Max PriceUS$433.97

Ownership Breakdown


Management Team

  • Teddy Gottwald (58yo)

    Chairman

    • Tenure: 15.6yrs
    • Compensation: US$2.10m
  • Bruce Hazelgrove (58yo)

    Executive VP & Chief Administrative Officer

    • Tenure: 0yrs
    • Compensation: US$1.23m
  • M. West (65yo)

    VP, General Counsel & Secretary

    • Tenure: 3.8yrs
    • Compensation: US$1.50m
  • Cameron Warner (60yo)

    Treasurer

    • Tenure: 8yrs
  • William Skrobacz (59yo)

    Principal Accounting Officer & Controller

    • Tenure: 6.4yrs
  • Brian Paliotti (42yo)

    VP & CFO

    • Tenure: 4.8yrs
    • Compensation: US$1.18m
  • Regina Harm (54yo)

    President of Afton Chemical Corporation

    • Tenure: 1.4yrs
    • Compensation: US$1.36m

Board Members

  • Bruce Gottwald (85yo)

    Director

    • Tenure: 57.8yrs
    • Compensation: US$85.00k
  • Teddy Gottwald (58yo)

    Chairman

    • Tenure: 15.6yrs
    • Compensation: US$2.10m
  • H. Harris (58yo)

    Independent Director

    • Tenure: 4.2yrs
    • Compensation: US$194.80k
  • Phyllis Cothran (72yo)

    Lead Director

    • Tenure: 0yrs
    • Compensation: US$199.80k
  • Mark Gambill (68yo)

    Independent Director

    • Tenure: 10.8yrs
    • Compensation: US$194.80k
  • Pat Hanley (74yo)

    Independent Director

    • Tenure: 15.1yrs
    • Compensation: US$184.80k
  • Jim Rogers (73yo)

    Independent Director

    • Tenure: 16.4yrs
    • Compensation: US$179.80k

Company Information

NewMarket Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: NewMarket Corporation
  • Ticker: NEU
  • Exchange: NYSE
  • Founded: 1887
  • Industry: Specialty Chemicals
  • Sector: Materials
  • Market Cap: US$5.200b
  • Shares outstanding: 11.19m
  • Website: https://www.newmarket.com

Number of Employees


Location

  • NewMarket Corporation
  • 330 South Fourth Street
  • Richmond
  • Virginia
  • 23219
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NEUNYSE (New York Stock Exchange)YesCommon Stock Without Par ValueUSUSDJan 1968
UG9DB (Deutsche Boerse AG)YesCommon Stock Without Par ValueDEEURJan 1968

Biography

NewMarket Corporation, through its subsidiaries, engages in the petroleum additives businesses. The company offers lubricant additives for use in various vehicle and industrial applications, including engi ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/14 01:40
End of Day Share Price2019/10/11 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.

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