Ashland (NYSE:ASH – Get Free Report) and NewMarket (NYSE:NEU – Get Free Report) are both mid-cap basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.
Analyst Recommendations
This is a breakdown of current ratings and price targets for Ashland and NewMarket, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ashland | 1 | 4 | 7 | 0 | 2.50 |
| NewMarket | 0 | 0 | 1 | 0 | 3.00 |
Ashland currently has a consensus price target of $65.20, suggesting a potential downside of 3.98%. Given Ashland’s higher possible upside, research analysts plainly believe Ashland is more favorable than NewMarket.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Ashland | $1.81 billion | 1.72 | -$845.00 million | ($15.42) | -4.40 |
| NewMarket | $2.73 billion | 2.66 | $418.75 million | $43.78 | 17.96 |
NewMarket has higher revenue and earnings than Ashland. Ashland is trading at a lower price-to-earnings ratio than NewMarket, indicating that it is currently the more affordable of the two stocks.
Dividends
Ashland pays an annual dividend of $1.68 per share and has a dividend yield of 2.5%. NewMarket pays an annual dividend of $12.00 per share and has a dividend yield of 1.5%. Ashland pays out -10.9% of its earnings in the form of a dividend. NewMarket pays out 27.4% 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. Ashland has raised its dividend for 16 consecutive years and NewMarket has raised its dividend for 7 consecutive years. Ashland is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Ashland and NewMarket’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ashland | -39.03% | 8.06% | 3.33% |
| NewMarket | 15.25% | 24.12% | 12.24% |
Volatility and Risk
Ashland has a beta of 0.41, meaning that its share price is 59% less volatile than the S&P 500. Comparatively, NewMarket has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500.
Insider and Institutional Ownership
93.9% of Ashland shares are held by institutional investors. Comparatively, 61.1% of NewMarket shares are held by institutional investors. 1.3% of Ashland shares are held by insiders. Comparatively, 8.6% of NewMarket shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Summary
NewMarket beats Ashland on 11 of the 17 factors compared between the two stocks.
About Ashland
Ashland Inc. provides additives and specialty ingredients in the North and Latin America, Europe, Asia Pacific, and internationally. It operates through Life Sciences, Personal Care, Specialty Additives, and Intermediates segments. The Life Sciences segment offers pharmaceutical solutions, including controlled release polymers, disintegrants, tablet coatings, thickeners, solubilizers, and tablet binders; nutrition solutions, such as thickeners, stabilizers, emulsifiers, and additives; and nutraceutical solutions comprising products for weight management, joint comfort, stomach and intestinal health, sports nutrition, and general wellness, as well as custom formulation, toll processing, and particle engineering solutions. Its Personal Care segment provides a range of nature-based, biodegradable, and performance ingredients; solutions for toothpastes, mouth washes and rinses, denture cleaning, and care for teeth; and household supplies nature-derived rheology ingredients, biodegradable surface wetting agents, performance encapsulates, and specialty polymers. The Specialty Additives segment offers rheology modifiers, foam control agents, surfactants and wetting agents, pH neutralizers, advanced ceramics used in catalytic converters, environmental filters, ingredients for the manufacturing of ceramic capacitors, plasma display panels and solar cells, ingredients for textile printing, thermoplastic metals, and alloys for welding. Its Intermediates segment produces 1,4 butanediol and related derivatives, including n-methylpyrrolidone. It offers its products to customers in a range of consumer and industrial markets, such as architectural coatings, construction, energy, food and beverage, nutraceuticals, personal care, and pharmaceutical. The company was formerly known as Ashland Global Holdings Inc. and changed its name to Ashland Inc. in August 2022. Ashland Inc. was founded in 1924 and is headquartered in Wilmington, Delaware.
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.
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