Financial Contrast: Huabao International (OTCMKTS:HUIHY) and NewMarket (NYSE:NEU)

NewMarket (NYSE:NEU) and Huabao International (OTCMKTS:HUIHY) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, profitability, valuation, dividends and institutional ownership.

Earnings & Valuation

This table compares NewMarket and Huabao International”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NewMarket	$2.79 billion	2.01	$462.41 million	$47.33	12.62
Huabao International	$469.25 million	3.44	-$53.62 million	N/A	N/A

NewMarket has higher revenue and earnings than Huabao International.

Dividends

NewMarket pays an annual dividend of $12.00 per share and has a dividend yield of 2.0%. Huabao International pays an annual dividend of $0.06 per share and has a dividend yield of 0.2%. NewMarket pays out 25.4% of its earnings in the form of a dividend. NewMarket has raised 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 NewMarket and Huabao International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NewMarket	16.33%	28.53%	14.02%
Huabao International	N/A	N/A	N/A

Analyst Recommendations

This is a breakdown of recent ratings for NewMarket and Huabao International, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NewMarket	0	0	1	0	3.00
Huabao International	0	0	0	0	0.00

Institutional & Insider Ownership

61.1% of NewMarket shares are owned by institutional investors. 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.

Risk & Volatility

NewMarket has a beta of 0.48, meaning that its stock price is 52% less volatile than the S&P 500. Comparatively, Huabao International has a beta of 0.23, meaning that its stock price is 77% less volatile than the S&P 500.

Summary

NewMarket beats Huabao International on 12 of the 14 factors compared between 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 Huabao International

Huabao International Holdings Limited, an investment holding company, researches, develops, produces, distributes, and sells flavours and fragrances, food ingredients, tobacco and aroma raw materials, and condiment products primarily in the People's Republic of China. It offers paper-making reconstituted tobacco leaves and new materials products for the tobacco industry. The company is also involved in the production and sale of natural extracts; tobacco flavours and fragrances; filter materials; cigarette filters; synthetic perfumes; and food flavours and fragrances. Huabao International Holdings Limited was founded in 1996 and is headquartered in Wan Chai, Hong Kong.