Element Solutions (NYSE:ESI) and NewMarket (NYSE:NEU) Head to Head Survey

Element Solutions (NYSE:ESI) and NewMarket (NYSE:NEU) are both mid-cap basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, risk, analyst recommendations, earnings, dividends and institutional ownership.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Element Solutions	$2.46 billion	2.53	$244.20 million	$1.00	25.71
NewMarket	$2.79 billion	2.79	$462.41 million	$50.45	16.39

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

Insider & Institutional Ownership

92.3% of Element Solutions shares are owned by institutional investors. Comparatively, 61.1% of NewMarket shares are owned by institutional investors. 6.9% of Element Solutions shares are owned by company insiders. Comparatively, 19.1% of NewMarket shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Element Solutions pays an annual dividend of $0.32 per share and has a dividend yield of 1.2%. NewMarket pays an annual dividend of $11.00 per share and has a dividend yield of 1.3%. Element Solutions pays out 32.0% of its earnings in the form of a dividend. NewMarket pays out 21.8% 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 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.

Analyst Recommendations

This is a summary of current recommendations for Element Solutions and NewMarket, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Element Solutions	0	1	8	1	3.00
NewMarket	0	0	0	0	0.00

Element Solutions currently has a consensus price target of $27.38, suggesting a potential upside of 6.47%. Given Element Solutions’ stronger consensus rating and higher probable upside, research analysts clearly believe Element Solutions is more favorable than NewMarket.

Volatility and Risk

Element Solutions has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500. Comparatively, NewMarket has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Element Solutions	9.66%	14.14%	7.17%
NewMarket	17.28%	32.25%	15.10%

Summary

NewMarket beats Element Solutions on 11 of the 18 factors compared between the two stocks.

About Element Solutions

Element Solutions Inc operates as a specialty chemicals company in the United States, China, and internationally. The company operates in two segments, Electronics, and Industrial & Specialty. The Electronics segment researches, formulates, and sells specialty chemicals and materials for various types of electronics hardware products. This segment also supplies surface mount technologies, fluxes, thermal management material, coatings, and other attachment materials; chemical formulations to the electronics industry; and advanced copper interconnects, die attachment, sintered silver material, adhesives, wafer bump processes, and photomask technologies for semiconductor industry. It primarily serves mobile communications, computers, automobiles, and aerospace equipment industries. The Industrial & Specialty segment provides industrial solutions, which include chemical systems that protect and decorate metal and plastic surfaces; consumable chemicals that enable printing image transfer on flexible packaging materials; and chemistries used in water-based hydraulic control fluids for offshore energy production applications. It serves aerospace, automotive, construction, consumer electronics, consumer packaged goods, and oil and gas production end markets. The company was formerly known as Platform Specialty Products Corporation and changed its name to Element Solutions Inc in January 2019. Element Solutions Inc was founded in 1785 and is headquartered in Fort Lauderdale, Florida.

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.