NEWMARKET CORP (NEU) Stock Fundamental Analysis
NYSE:NEU - New York Stock Exchange, Inc. - US6515871076 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to NEU. NEU was compared to 84 industry peers in the Chemicals industry. Both the health and profitability get an excellent rating, making NEU a very profitable company, without any liquidiy or solvency issues. NEU has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
NEU had positive earnings in the past year.
In the past year NEU had a positive cash flow from operations.
NEU had positive earnings in each of the past 5 years.
Each year in the past 5 years NEU had a positive operating cash flow.
1.2 Ratios
The Return On Assets of NEU (14.81%) is better than 100.00% of its industry peers.
NEU has a better Return On Equity (31.52%) than 98.81% of its industry peers.
NEU has a Return On Invested Capital of 17.04%. This is amongst the best in the industry. NEU outperforms 98.81% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NEU is significantly above the industry average of 6.84%.
The 3 year average ROIC (16.97%) for NEU is below the current ROIC(17.04%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.81% | ||
| ROE | 31.52% | ||
| ROIC | 17.04% |
ROA(3y)14.36%
ROA(5y)12.9%
ROE(3y)34.69%
ROE(5y)32.92%
ROIC(3y)16.97%
ROIC(5y)15.47%
1.3 Margins
Looking at the Profit Margin, with a value of 17.16%, NEU belongs to the top of the industry, outperforming 96.43% of the companies in the same industry.
In the last couple of years the Profit Margin of NEU has grown nicely.
NEU's Operating Margin of 21.83% is amongst the best of the industry. NEU outperforms 89.29% of its industry peers.
NEU's Operating Margin has improved in the last couple of years.
NEU has a Gross Margin (32.46%) which is comparable to the rest of the industry.
In the last couple of years the Gross Margin of NEU has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.83% | ||
| PM (TTM) | 17.16% | ||
| GM | 32.46% |
OM growth 3Y24.62%
OM growth 5Y6.58%
PM growth 3Y26.95%
PM growth 5Y7.37%
GM growth 3Y11.02%
GM growth 5Y2.04%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so NEU is creating value.
NEU has less shares outstanding than it did 1 year ago.
The number of shares outstanding for NEU has been reduced compared to 5 years ago.
NEU has a worse debt/assets ratio than last year.
2.2 Solvency
NEU has an Altman-Z score of 4.50. This indicates that NEU is financially healthy and has little risk of bankruptcy at the moment.
NEU's Altman-Z score of 4.50 is amongst the best of the industry. NEU outperforms 89.29% of its industry peers.
NEU has a debt to FCF ratio of 2.06. This is a good value and a sign of high solvency as NEU would need 2.06 years to pay back of all of its debts.
NEU has a better Debt to FCF ratio (2.06) than 89.29% of its industry peers.
NEU has a Debt/Equity ratio of 0.65. This is a neutral value indicating NEU is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.65, NEU perfoms like the industry average, outperforming 48.81% of the companies in the same industry.
Although NEU does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.65 | ||
| Debt/FCF | 2.06 | ||
| Altman-Z | 4.5 |
ROIC/WACC1.91
WACC8.94%
2.3 Liquidity
NEU has a Current Ratio of 2.84. This indicates that NEU is financially healthy and has no problem in meeting its short term obligations.
With an excellent Current ratio value of 2.84, NEU belongs to the best of the industry, outperforming 80.95% of the companies in the same industry.
A Quick Ratio of 1.60 indicates that NEU should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.60, NEU is in the better half of the industry, outperforming 67.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.84 | ||
| Quick Ratio | 1.6 |
3. Growth
3.1 Past
NEU shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 20.86%, which is quite impressive.
Measured over the past years, NEU shows a quite strong growth in Earnings Per Share. The EPS has been growing by 16.30% on average per year.
NEU shows a small growth in Revenue. In the last year, the Revenue has grown by 3.65%.
Measured over the past years, NEU shows a small growth in Revenue. The Revenue has been growing by 4.93% on average per year.
EPS 1Y (TTM)20.86%
EPS 3Y39.88%
EPS 5Y16.3%
EPS Q2Q%18.08%
Revenue 1Y (TTM)3.65%
Revenue growth 3Y5.75%
Revenue growth 5Y4.93%
Sales Q2Q%0.6%
3.2 Future
No EPS estimates are available, so we could not analyze the future EPS growth and evolution.
No Revenue estimates are available, so we could not analyze the future revenue growth and evolution.
EPS Next YN/A
EPS Next 2YN/A
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next YearN/A
Revenue Next 2YN/A
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
No EPS estimates are available, so we could not analyze the future EPS growth and evolution.
No Revenue estimates are available, so we could not analyze the future revenue growth and evolution.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 12.72, the valuation of NEU can be described as correct.
Based on the Price/Earnings ratio, NEU is valued a bit cheaper than the industry average as 77.38% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 26.57, NEU is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.72 | ||
| Fwd PE | N/A |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NEU is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, NEU is valued cheaper than 84.52% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.55 | ||
| EV/EBITDA | 9.46 |
4.3 Compensation for Growth
The excellent profitability rating of NEU may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.78
EPS Next 2YN/A
EPS Next 3YN/A
5. Dividend
5.1 Amount
NEU has a Yearly Dividend Yield of 1.68%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.68, NEU has a dividend in line with its industry peers.
NEU's Dividend Yield is slightly below the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.68% |
5.2 History
On average, the dividend of NEU grows each year by 6.59%, which is quite nice.
NEU has been paying a dividend for at least 10 years, so it has a reliable track record.
NEU has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)6.59%
Div Incr Years6
Div Non Decr Years18
5.3 Sustainability
NEU pays out 20.46% of its income as dividend. This is a sustainable payout ratio.
The dividend of NEU is growing, but earnings are growing more, so the dividend growth is sustainable.
DP20.46%
EPS Next 2YN/A
EPS Next 3YN/A
638.99
-9.71 (-1.5%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners65.27%
Inst Owner Change1.98%
Ins Owners6.61%
Ins Owner Change-1.99%
Market Cap6.03B
Analysts45
Price TargetN/A
Short Float %1.29%
Short Ratio1.17
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.68% |
Yearly Dividend10.03
Dividend Growth(5Y)6.59%
DP20.46%
Div Incr Years6
Div Non Decr Years18
Ex-Date
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)N/A
Avg Revenue beat(2)N/A
Min Revenue beat(2)N/A
Max Revenue beat(2)N/A
Revenue beat(4)N/A
Avg Revenue beat(4)N/A
Min Revenue beat(4)N/A
Max Revenue beat(4)N/A
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)N/A
PT rev (3m)N/A
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)N/A
EPS NY rev (3m)N/A
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)N/A
Revenue NY rev (3m)N/A
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.72 | ||
| Fwd PE | N/A | ||
| P/S | 2.16 | ||
| P/FCF | 12.55 | ||
| P/OCF | 11.22 | ||
| P/B | 3.97 | ||
| P/tB | 7.77 | ||
| EV/EBITDA | 9.46 |
EPS(TTM)50.24
EY7.86%
EPS(NY)N/A
Fwd EYN/A
FCF(TTM)50.93
FCFY7.97%
OCF(TTM)56.95
OCFY8.91%
SpS295.95
BVpS161.13
TBVpS82.22
PEG (NY)N/A
PEG (5Y)0.78
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.81% | ||
| ROE | 31.52% | ||
| ROCE | 21.47% | ||
| ROIC | 17.04% | ||
| ROICexc | 17.78% | ||
| ROICexgc | 24.48% | ||
| OM | 21.83% | ||
| PM (TTM) | 17.16% | ||
| GM | 32.46% | ||
| FCFM | 17.21% |
ROA(3y)14.36%
ROA(5y)12.9%
ROE(3y)34.69%
ROE(5y)32.92%
ROIC(3y)16.97%
ROIC(5y)15.47%
ROICexc(3y)17.71%
ROICexc(5y)16.91%
ROICexgc(3y)20.83%
ROICexgc(5y)19.4%
ROCE(3y)21.39%
ROCE(5y)19.49%
ROICexcg growth 3Y13.97%
ROICexcg growth 5Y3.36%
ROICexc growth 3Y5.51%
ROICexc growth 5Y-1.33%
OM growth 3Y24.62%
OM growth 5Y6.58%
PM growth 3Y26.95%
PM growth 5Y7.37%
GM growth 3Y11.02%
GM growth 5Y2.04%
F-Score8
Asset Turnover0.86
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.65 | ||
| Debt/FCF | 2.06 | ||
| Debt/EBITDA | 1.36 | ||
| Cap/Depr | 47.34% | ||
| Cap/Sales | 2.03% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 73.67% | ||
| Profit Quality | 100.3% | ||
| Current Ratio | 2.84 | ||
| Quick Ratio | 1.6 | ||
| Altman-Z | 4.5 |
F-Score8
WACC8.94%
ROIC/WACC1.91
Cap/Depr(3y)59.73%
Cap/Depr(5y)76.77%
Cap/Sales(3y)1.96%
Cap/Sales(5y)2.77%
Profit Quality(3y)85.17%
Profit Quality(5y)74.31%
High Growth Momentum
Growth
EPS 1Y (TTM)20.86%
EPS 3Y39.88%
EPS 5Y16.3%
EPS Q2Q%18.08%
EPS Next YN/A
EPS Next 2YN/A
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)3.65%
Revenue growth 3Y5.75%
Revenue growth 5Y4.93%
Sales Q2Q%0.6%
Revenue Next YearN/A
Revenue Next 2YN/A
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y22.13%
EBIT growth 3Y31.78%
EBIT growth 5Y11.83%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y207.49%
FCF growth 3Y74.9%
FCF growth 5Y10.72%
OCF growth 1Y153.69%
OCF growth 3Y46.49%
OCF growth 5Y9.03%