Head-To-Head Analysis: NewMarket (NYSE:NEU) & Mitsubishi Chemical (OTCMKTS:MTLHY)

Mitsubishi Chemical (OTCMKTS:MTLHY) and NewMarket (NYSE:NEU) are both materials companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, risk, analyst recommendations, institutional ownership, valuation and earnings.

Institutional and Insider Ownership

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for Mitsubishi Chemical and NewMarket, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mitsubishi Chemical	0	0	0	0	0.00
NewMarket	0	0	1	0	3.00

Risk and Volatility

Mitsubishi Chemical has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, NewMarket has a beta of 0.55, suggesting that its stock price is 45% less volatile than the S&P 500.

Valuation and Earnings

This table compares Mitsubishi Chemical and NewMarket”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mitsubishi Chemical	$24.61 billion	0.43	$439.53 million	$1.84	20.14
NewMarket	$2.73 billion	3.04	$418.75 million	$46.48	19.36

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Mitsubishi Chemical	N/A	N/A	N/A
NewMarket	15.80%	24.62%	12.51%

Dividends

Mitsubishi Chemical pays an annual dividend of $0.66 per share and has a dividend yield of 1.8%. NewMarket pays an annual dividend of $12.00 per share and has a dividend yield of 1.3%. Mitsubishi Chemical pays out 35.9% of its earnings in the form of a dividend. NewMarket pays out 25.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. NewMarket has raised its dividend for 7 consecutive years.

Summary

NewMarket beats Mitsubishi Chemical on 11 of the 16 factors compared between the two stocks.

About Mitsubishi Chemical

Mitsubishi Chemical Group Corporation provides performance products, chemicals, industrial gases, health care products, and other products in Japan and internationally. It operates in five segments: Specialty Materials, Industrial Gases, Health Care, MMA, and Basic Materials. The Specialty Materials segment offers performance polymers, soarnol, gohsenol, sustainable polymers, and engineering plastics; coating materials, additives, and fines; packaging, industrial and medical, acetyl, and polyester films; engineering shapes and solutions, carbon fiber and composite materials, and fibers; aqua, life, and infrastructure solutions; and semiconductor, electronics, and battery materials. The Industrial Gases segment provides industrial gases. The Health Care segment offers ethical pharmaceuticals. The MMA segment provides methyl methacrylate (MMA) and polymethyl methacrylate (PMMA). The Basic Materials segment offers basic petrochemicals, polyolefins, and basic chemical derivatives, as well as carbon products. The company provides engineering, transportation, and warehousing services. Mitsubishi Chemical Group Corporation was incorporated in 2005 and is headquartered in Tokyo, Japan.

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.