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

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CSW Industrials $341.00 million 2.13 $58.23 million $0.98 46.68
NewMarket Corporation $2.11 billion 2.42 $402.53 million $20.57 20.90

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

Insider and Institutional Ownership

69.4% of CSW Industrials shares are owned by institutional investors. Comparatively, 55.3% of NewMarket Corporation shares are owned by institutional investors. 2.1% of CSW Industrials shares are owned by company insiders. Comparatively, 16.8% of NewMarket Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

NewMarket Corporation pays an annual dividend of $7.00 per share and has a dividend yield of 1.6%. CSW Industrials does not pay a dividend. NewMarket Corporation pays out 34.0% of its earnings in the form of a dividend. CSW Industrials has increased its dividend for 8 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and target prices for CSW Industrials and NewMarket Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CSW Industrials 0 0 1 0 3.00
NewMarket Corporation 0 0 0 0 N/A

Profitability

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

Net Margins Return on Equity Return on Assets
CSW Industrials 4.54% 10.53% 7.39%
NewMarket Corporation 11.57% 46.94% 16.19%

Risk and Volatility

CSW Industrials has a beta of 1.36, indicating that its share price is 36% more volatile than the S&P 500. Comparatively, NewMarket Corporation has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500.

Summary

NewMarket Corporation beats CSW Industrials on 9 of the 15 factors compared between the two stocks.

CSW Industrials Company Profile

CSW Industrials, Inc. (CSWI) is a diversified industrial growth company. The Company operates through three segments: Industrial Products; Coatings, Sealants & Adhesives, and Specialty Chemicals. The Industrial Products segment consists of specialty mechanical products; fire and smoke protection products; architecturally specified building products, and storage, filtration and application equipment. The Coatings, Sealants & Adhesives segment comprises coatings and penetrants, pipe thread sealants, firestopping sealants, and caulks and adhesives/solvent cements. The Specialty Chemicals segment manufactures and supplies specialized consumables that impart or enhance properties, such as lubricity, anti-seize qualities, friction and heat control. Markets that it serves include HVAC, industrial, rail, plumbing, architecturally specified building products, energy, mining and other general industrial markets.

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.

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