Contrasting 5E Advanced Materials (NASDAQ:FEAM) and NewMarket (NYSE:NEU)

5E Advanced Materials (NASDAQ:FEAM) and NewMarket (NYSE:NEU) are both basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, valuation, institutional ownership, analyst recommendations, earnings, risk and dividends.

Insider & Institutional Ownership

61.1% of NewMarket shares are owned by institutional investors. 0.2% of 5E Advanced Materials shares are owned by insiders. Comparatively, 8.6% of NewMarket shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

5E Advanced Materials has a beta of 1.84, indicating that its share price is 84% more volatile than the S&P 500. Comparatively, NewMarket has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for 5E Advanced Materials and NewMarket, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
5E Advanced Materials	1	1	2	0	2.25
NewMarket	0	1	0	0	2.00

5E Advanced Materials currently has a consensus price target of $6.25, indicating a potential upside of 214.07%. Given 5E Advanced Materials’ stronger consensus rating and higher probable upside, research analysts clearly believe 5E Advanced Materials is more favorable than NewMarket.

Valuation & Earnings

This table compares 5E Advanced Materials and NewMarket”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
5E Advanced Materials	N/A	N/A	-$31.56 million	($2.67)	-0.75
NewMarket	$2.69 billion	2.36	$418.75 million	$43.78	15.78

NewMarket has higher revenue and earnings than 5E Advanced Materials. 5E Advanced Materials is trading at a lower price-to-earnings ratio than NewMarket, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares 5E Advanced Materials and NewMarket’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
5E Advanced Materials	N/A	-74.45%	-65.79%
NewMarket	15.25%	24.12%	12.24%

Summary

NewMarket beats 5E Advanced Materials on 9 of the 13 factors compared between the two stocks.

About 5E Advanced Materials

5E Advanced Materials, Inc. engages in the exploration and development of mineral properties in Australia and the United States. The company primarily explores for borates and lithium deposits. It holds 100% interest in the Fort Cady project located in the Mojave Desert region in eastern San Bernardino County, California. The company was formerly known as American Pacific Borates Limited. The company was incorporated in 2016 and is based in Hesperia, California.

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.