DAQO New Energy (NYSE:DQ) versus NewMarket (NYSE:NEU) Head to Head Comparison

NewMarket (NYSE:NEU) and DAQO New Energy (NYSE:DQ) 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, risk, valuation, dividends, profitability and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for NewMarket and DAQO New Energy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NewMarket	0	0	1	0	3.00
DAQO New Energy	2	3	1	1	2.14

DAQO New Energy has a consensus target price of $23.59, indicating a potential upside of 92.19%. Given DAQO New Energy’s higher possible upside, analysts plainly believe DAQO New Energy is more favorable than NewMarket.

Profitability

This table compares NewMarket and DAQO New Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NewMarket	15.25%	24.12%	12.24%
DAQO New Energy	-32.92%	-3.19%	-2.94%

Risk & Volatility

NewMarket has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500. Comparatively, DAQO New Energy has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500.

Valuation & Earnings

This table compares NewMarket and DAQO New Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NewMarket	$2.73 billion	2.66	$418.75 million	$43.78	17.98
DAQO New Energy	$665.41 million	1.25	-$170.51 million	($2.78)	-4.42

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

Insider and Institutional Ownership

61.1% of NewMarket shares are owned by institutional investors. Comparatively, 47.2% of DAQO New Energy shares are owned by institutional investors. 8.6% of NewMarket shares are owned by company insiders. Comparatively, 24.3% of DAQO New Energy shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

NewMarket beats DAQO New Energy on 10 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 DAQO New Energy

Daqo New Energy Corp., together with its subsidiaries, manufactures and sells polysilicon to photovoltaic product manufacturers in the People's Republic of China. Its products are used in ingots, wafers, cells, and modules for solar power solutions. The company was formerly known as Mega Stand International Limited and changed its name to Daqo New Energy Corp. in August 2009. Daqo New Energy Corp. was founded in 2006 and is based in Shanghai, the People's Republic of China.