Critical Contrast: Axalta Coating Systems (NYSE:AXTA) and NewMarket (NYSE:NEU)

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for NewMarket and Axalta Coating Systems, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NewMarket	0	1	0	0	2.00
Axalta Coating Systems	0	12	7	0	2.37

Axalta Coating Systems has a consensus price target of $36.56, indicating a potential upside of 6.98%. Given Axalta Coating Systems’ stronger consensus rating and higher possible upside, analysts plainly believe Axalta Coating Systems is more favorable than NewMarket.

Insider and Institutional Ownership

61.1% of NewMarket shares are owned by institutional investors. Comparatively, 98.3% of Axalta Coating Systems shares are owned by institutional investors. 19.1% of NewMarket shares are owned by company insiders. Comparatively, 0.3% of Axalta Coating Systems shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

NewMarket has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500. Comparatively, Axalta Coating Systems has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500.

Profitability

This table compares NewMarket and Axalta Coating Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NewMarket	15.37%	25.38%	12.73%
Axalta Coating Systems	7.39%	23.60%	7.07%

Earnings and Valuation

This table compares NewMarket and Axalta Coating Systems”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NewMarket	$2.73 billion	2.13	$418.75 million	$44.42	13.93
Axalta Coating Systems	$5.12 billion	1.43	$378.00 million	$1.74	19.64

NewMarket has higher earnings, but lower revenue than Axalta Coating Systems. NewMarket is trading at a lower price-to-earnings ratio than Axalta Coating Systems, indicating that it is currently the more affordable of 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 Axalta Coating Systems

Axalta Coating Systems Ltd., through its subsidiaries, manufactures, markets, and distributes high-performance coatings systems in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The company operates through two segments, Performance Coatings and Mobility Coatings. It also offers water and solvent-borne products and systems to repair damaged vehicles for independent body shops, multi-shop operators, and original equipment manufacturer (OEM) dealership body shops. In addition, the company provides functional and decorative liquid, and powder coatings used in various industrial applications, including building materials, cabinet, wood and luxury vinyl flooring and furniture market under the Voltatex, AquaEC, Durapon, Hydropon, UNRIVALED, Ceranamel, Industrial, Corlar Industrial, Tufcote, Imron Industrial, Alesta, Teodur, Nap-Gard, Abcite, and Plascoat brands for powder coatings. Further, it develops and supplies electrocoat, primer, the basecoat, and clearcoat products for OEMs of light and commercial vehicles; and coatings systems for various commercial applications, including HDT, MDT, bus, and rail under the Imron, Imron Elite, Centari, Rival, Corlar epoxy undercoats, and AquaEC brands. The company offers products under the Audurra, Abcite, Alesta, AquaEC, Centari, Ceranamel, Challenger, Chemophan, ColorNet, Cromax, Cromax Mosaic, Durapon 70, Duxone, Harmonized Coating Technologies, Imron ExcelPro, Lutophen, Nason, Spies Hecker, Standox, Stollaquid, Syntopal, Syrox, Raptor, U-POL, and Vermeera brand names. The company was formerly known as Axalta Coating Systems Bermuda Co., Ltd. and changed its name to Axalta Coating Systems Ltd. in August 2014. Axalta Coating Systems Ltd. was founded in 1866 and is headquartered in Glen Mills, Pennsylvania.