NewMarket Corporation (NYSE: NEU) and Enzymotec (NASDAQ:ENZY) are both basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, profitability and dividends.

Dividends

NewMarket Corporation pays an annual dividend of $7.00 per share and has a dividend yield of 1.7%. Enzymotec does not pay a dividend. NewMarket Corporation pays out 34.0% of its earnings in the form of a dividend. Enzymotec has increased its dividend for 8 consecutive years.

Risk and Volatility

NewMarket Corporation has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500. Comparatively, Enzymotec has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for NewMarket Corporation and Enzymotec, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NewMarket Corporation 0 1 0 0 2.00
Enzymotec 0 2 0 0 2.00

Enzymotec has a consensus price target of $8.00, indicating a potential downside of 31.62%. Given Enzymotec’s higher possible upside, analysts plainly believe Enzymotec is more favorable than NewMarket Corporation.

Valuation & Earnings

This table compares NewMarket Corporation and Enzymotec’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NewMarket Corporation $2.11 billion 2.37 $402.53 million $20.57 20.48
Enzymotec $47.01 million 5.71 -$4.56 million ($0.29) -40.34

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

Institutional and Insider Ownership

55.5% of NewMarket Corporation shares are held by institutional investors. Comparatively, 27.9% of Enzymotec shares are held by institutional investors. 16.8% of NewMarket Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
NewMarket Corporation 11.57% 46.94% 16.19%
Enzymotec -14.52% -3.88% -3.58%

Summary

NewMarket Corporation beats Enzymotec on 9 of the 14 factors compared between the two stocks.

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.

Enzymotec Company Profile

Enzymotec Ltd. is a nutritional ingredients and medical foods company. The Company’s technologies, research expertise and clinical validation process enables it to develop solutions across a range of products. The Company operates in two segments: Nutrition segment and VAYA Pharma segment. Both of the Company’s segments offer a range of products that leverage its lipid-related offerings. Its product suite addresses the entire human life-cycle, from infancy to old age, and comprises ingredients in products ranging from infant formula to nutritional supplements, as well as branded medical foods, sold only under a doctor’s supervision. It markets its product portfolio to established global consumer companies and physicians and target large and growing consumer health and wellness markets. The Company’s clinically-validated products include bio-functional lipid-based compounds designed to address dietary needs, medical disorders and common diseases.

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