NewMarket Corporation Fundamental Analysis (NYSE: NEU)
NewMarket Corporation (NYSE: NEU) shows moderate financial fundamentals with a PE ratio of 14.76, profit margin of 16.51%, and ROE of 25.12%. The company generates $2.8B in annual revenue with weak year-over-year growth of -2.20%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 70.4/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze NEU's fundamental strength across five key dimensions:
Efficiency Score
ExcellentNEU demonstrates superior asset utilization.
Valuation Score
ModerateNEU shows balanced valuation metrics.
Growth Score
WeakNEU faces weak or negative growth trends.
Financial Health Score
ExcellentNEU maintains a strong and stable balance sheet.
Profitability Score
ExcellentNEU achieves industry-leading margins.
Key Financial Metrics
Is NEU Expensive or Cheap?
P/E Ratio
NEU trades at 14.76 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, NEU's PEG of 3.70 indicates potential overvaluation.
Price to Book
The market values NewMarket Corporation at 3.46 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 7.81 times EBITDA. This is generally considered low.
How Well Does NEU Make Money?
Net Profit Margin
For every $100 in sales, NewMarket Corporation keeps $16.51 as profit after all expenses.
Operating Margin
Core operations generate 20.22 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $25.12 in profit for every $100 of shareholder equity.
ROA
NewMarket Corporation generates $12.53 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
NewMarket Corporation produces operating cash flow of $525.12M, showing steady but balanced cash generation.
Free Cash Flow
NewMarket Corporation generates strong free cash flow of $408.60M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $44.43 in free cash annually.
FCF Yield
NEU converts 6.14% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
14.76
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
3.70
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.46
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.41
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.47
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.46
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.25
vs 25 benchmark
ROA
Return on assets percentage
0.13
vs 25 benchmark
ROCE
Return on capital employed
0.18
vs 25 benchmark
How NEU Stacks Against Its Sector Peers
| Metric | NEU Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 14.76 | 25.69 | Better (Cheaper) |
| ROE | 25.12% | 1295.00% | Weak |
| Net Margin | 16.51% | 478.00% | Weak |
| Debt/Equity | 0.47 | 0.75 | Strong (Low Leverage) |
| Current Ratio | 2.46 | 3.02 | Strong Liquidity |
| ROA | 12.53% | -47.00% (disorted) | Strong |
NEU outperforms its industry in 4 out of 6 key metrics, particularly excelling in ROA, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews NewMarket Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
58.26%
Industry Style: Cyclical, Commodity, Value
High GrowthEPS CAGR
80.74%
Industry Style: Cyclical, Commodity, Value
High GrowthFCF CAGR
133.83%
Industry Style: Cyclical, Commodity, Value
High Growth