RPM International (NYSE:RPM) versus NewMarket (NYSE:NEU) Head to Head Analysis

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

Analyst Ratings

This is a breakdown of current ratings and target prices for NewMarket and RPM International, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NewMarket	0	0	1	0	3.00
RPM International	0	7	6	0	2.46

RPM International has a consensus price target of $130.18, suggesting a potential upside of 23.42%. Given RPM International’s higher possible upside, analysts plainly believe RPM International is more favorable than NewMarket.

Insider & Institutional Ownership

61.1% of NewMarket shares are owned by institutional investors. Comparatively, 80.9% of RPM International shares are owned by institutional investors. 19.1% of NewMarket shares are owned by company insiders. Comparatively, 1.6% of RPM International 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.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NewMarket	$2.79 billion	2.58	$462.41 million	$47.33	16.16
RPM International	$7.52 billion	1.80	$688.69 million	$5.35	19.72

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

Dividends

NewMarket pays an annual dividend of $11.00 per share and has a dividend yield of 1.4%. RPM International pays an annual dividend of $2.16 per share and has a dividend yield of 2.0%. NewMarket pays out 23.2% of its earnings in the form of a dividend. RPM International pays out 40.4% 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. NewMarket has raised its dividend for 7 consecutive years and RPM International has raised its dividend for 51 consecutive years. RPM International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

NewMarket has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500. Comparatively, RPM International has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500.

Profitability

This table compares NewMarket and RPM 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%
RPM International	9.16%	24.22%	9.46%

Summary

RPM International beats NewMarket on 9 of the 17 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 RPM International

RPM International Inc. manufactures and sells specialty chemicals for the industrial, specialty, and consumer markets worldwide. It offers waterproofing, coating, and traditional roofing systems; sealants, air barriers, tapes, and foams; residential home weatherization systems; roofing and building maintenance services; sealing and bonding, subfloor preparation, flooring, and glazing solutions; resin flooring systems, polyurethane, MMA waterproof, epoxy floor paint and coatings, concrete repair, and protection products; fire stopping and intumescent steel coating, and manufacturing industry solutions; rolled asphalt roofing materials and chemical admixtures; concrete and masonry admixtures, concrete fibers, curing and sealing compounds, structural grouts and mortars, epoxy adhesives, injection resins, polyurethane foams, floor hardeners and toppings, joint fillers, industrial and architectural coatings, decorative color/stains/stamps, and restoration materials; insulated building cladding materials; and concrete form wall systems. It also provides polymer flooring systems; fiberglass reinforced plastic gratings and shapes; corrosion-control coating, containment and railcar lining, fire and sound proofing, and heat and cryogenic insulation products; specialty construction products; amine curing agents, reactive diluents, and epoxy resins; fluorescent colorants and pigments; shellac-based-specialty and marine coatings; fire and water damage restoration, carpet cleaning, and disinfecting products; fuel additives; wood treatments, coatings, and touch-up products; and nail enamels, polishes, and coating components. In addition, it offers solutions for the paint contractors and DIYers, concrete restoration and flooring, metallic and faux finish coatings, cleaners, and hobby paints and cements; and caulks, adhesives, insulating foams, and patches, as well as spackling, glazing, and repair products. The company was incorporated in 1947 and is headquartered in Medina, Ohio.