NewMarket (NYSE:NEU) and Koppers (NYSE:KOP) Head-To-Head Contrast

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

Analyst Recommendations

This is a breakdown of current ratings for Koppers and NewMarket, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Koppers	1	1	1	1	2.50
NewMarket	0	0	1	0	3.00

Koppers presently has a consensus target price of $55.00, indicating a potential upside of 31.80%. Given Koppers’ higher probable upside, equities research analysts plainly believe Koppers is more favorable than NewMarket.

Valuation and Earnings

This table compares Koppers and NewMarket”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Koppers	$1.88 billion	0.42	$56.00 million	($4.72)	-8.84
NewMarket	$2.73 billion	2.54	$418.75 million	$49.31	15.26

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

Institutional & Insider Ownership

92.7% of Koppers shares are owned by institutional investors. Comparatively, 61.1% of NewMarket shares are owned by institutional investors. 7.3% of Koppers shares are owned by insiders. Comparatively, 8.6% of NewMarket shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Koppers pays an annual dividend of $0.36 per share and has a dividend yield of 0.9%. NewMarket pays an annual dividend of $12.00 per share and has a dividend yield of 1.6%. Koppers pays out -7.6% of its earnings in the form of a dividend. NewMarket pays out 24.3% 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. Koppers has increased its dividend for 2 consecutive years and NewMarket has increased its dividend for 7 consecutive years. NewMarket is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Koppers	-4.59%	14.98%	4.17%
NewMarket	16.51%	25.12%	12.82%

Risk and Volatility

Koppers has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500. Comparatively, NewMarket has a beta of 0.59, suggesting that its stock price is 41% less volatile than the S&P 500.

Summary

NewMarket beats Koppers on 12 of the 17 factors compared between the two stocks.

About Koppers

Koppers Holdings Inc. provides treated wood products, wood preservation chemicals, and carbon compounds in the United States, Australasia, Europe, and internationally. The company operates through Railroad and Utility Products and Services (RUPS), Performance Chemicals (PC), and Carbon Materials and Chemicals (CMC) segments. The RUPS segment procures and treats crossties, switch ties, and various types of lumber used for railroad bridges and crossings. It also provides rail joint bars to join rails together for railroads; transmission and distribution poles for electric and telephone utilities; and pilings. This segment provides railroad services, such as engineering, design, repair, and inspection services for railroad bridges. The PC segment develops, manufactures, and markets copper-based wood preservatives, including micronized copper azole, micronized pigments, alkaline copper quaternary, amine copper azole, and chromated copper arsenate for decking, fencing, utility poles, construction lumber and timbers, and various agricultural uses; and supplies fire-retardant chemicals for pressure treatment of wood primarily in commercial construction. The CMC segment manufactures creosote for the treatment of wood or as a feedstock in the production of carbon black; carbon pitch, a raw material used in the production of aluminum and steel; naphthalene for use as a feedstock in the production of phthalic anhydride and as a surfactant in the production of concrete; phthalic anhydride for the production of plasticizers, polyester resins, and alkyd paints; and carbon black feedstock for use in the production of carbon black. It serves the railroad, specialty chemical, utility, residential lumber, agriculture, aluminum, steel, rubber, and construction sectors. Koppers Holdings Inc. was founded in 1988 and is based in Pittsburgh, Pennsylvania.

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.