Head-To-Head Contrast: Ashland (NYSE:ASH) vs. NewMarket (NYSE:NEU)

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

Dividends

NewMarket pays an annual dividend of $12.00 per share and has a dividend yield of 1.4%. Ashland pays an annual dividend of $1.68 per share and has a dividend yield of 2.3%. NewMarket pays out 25.8% of its earnings in the form of a dividend. Ashland pays out 147.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NewMarket has raised its dividend for 7 consecutive years and Ashland has raised its dividend for 16 consecutive years. Ashland is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares NewMarket and Ashland”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NewMarket	$2.73 billion	2.88	$418.75 million	$46.48	18.37
Ashland	$1.82 billion	1.80	-$845.00 million	$1.14	62.98

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NewMarket	15.80%	24.62%	12.51%
Ashland	2.82%	8.03%	3.31%

Institutional & Insider Ownership

61.1% of NewMarket shares are owned by institutional investors. Comparatively, 94.0% of Ashland shares are owned by institutional investors. 8.6% of NewMarket shares are owned by company insiders. Comparatively, 1.3% of Ashland shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility and Risk

NewMarket has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500. Comparatively, Ashland has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for NewMarket and Ashland, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NewMarket	0	0	1	0	3.00
Ashland	0	5	7	0	2.58

Ashland has a consensus price target of $71.90, suggesting a potential upside of 0.15%. Given Ashland’s higher probable upside, analysts plainly believe Ashland is more favorable than NewMarket.

Summary

NewMarket beats Ashland on 11 of the 17 factors compared between the two stocks.

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.

About Ashland

Ashland Inc. provides additives and specialty ingredients in the North and Latin America, Europe, Asia Pacific, and internationally. It operates through Life Sciences, Personal Care, Specialty Additives, and Intermediates segments. The Life Sciences segment offers pharmaceutical solutions, including controlled release polymers, disintegrants, tablet coatings, thickeners, solubilizers, and tablet binders; nutrition solutions, such as thickeners, stabilizers, emulsifiers, and additives; and nutraceutical solutions comprising products for weight management, joint comfort, stomach and intestinal health, sports nutrition, and general wellness, as well as custom formulation, toll processing, and particle engineering solutions. Its Personal Care segment provides a range of nature-based, biodegradable, and performance ingredients; solutions for toothpastes, mouth washes and rinses, denture cleaning, and care for teeth; and household supplies nature-derived rheology ingredients, biodegradable surface wetting agents, performance encapsulates, and specialty polymers. The Specialty Additives segment offers rheology modifiers, foam control agents, surfactants and wetting agents, pH neutralizers, advanced ceramics used in catalytic converters, environmental filters, ingredients for the manufacturing of ceramic capacitors, plasma display panels and solar cells, ingredients for textile printing, thermoplastic metals, and alloys for welding. Its Intermediates segment produces 1,4 butanediol and related derivatives, including n-methylpyrrolidone. It offers its products to customers in a range of consumer and industrial markets, such as architectural coatings, construction, energy, food and beverage, nutraceuticals, personal care, and pharmaceutical. The company was formerly known as Ashland Global Holdings Inc. and changed its name to Ashland Inc. in August 2022. Ashland Inc. was founded in 1924 and is headquartered in Wilmington, Delaware.