Contrasting NewMarket (NYSE:NEU) and H. B. Fuller (NYSE:FUL)

H. B. Fuller (NYSE:FUL – 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, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Institutional & Insider Ownership

95.9% of H. B. Fuller shares are held by institutional investors. Comparatively, 61.1% of NewMarket shares are held by institutional investors. 1.8% of H. B. Fuller 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.

Volatility and Risk

H. B. Fuller has a beta of 0.96, meaning that its share price is 4% 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.

Dividends

H. B. Fuller pays an annual dividend of $0.98 per share and has a dividend yield of 1.6%. NewMarket pays an annual dividend of $12.00 per share and has a dividend yield of 1.5%. H. B. Fuller pays out 32.3% 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. H. B. Fuller has increased its dividend for 57 consecutive years and NewMarket has increased its dividend for 7 consecutive years. H. B. Fuller is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares H. B. Fuller and NewMarket’s net margins, return on equity and return on assets.

Analyst Ratings

This is a summary of recent ratings and price targets for H. B. Fuller and NewMarket, as provided by MarketBeat.com.

H. B. Fuller presently has a consensus target price of $63.80, suggesting a potential upside of 5.57%. Given H. B. Fuller’s stronger consensus rating and higher possible upside, equities research analysts plainly believe H. B. Fuller is more favorable than NewMarket.

Valuation and Earnings

This table compares H. B. Fuller and NewMarket”s revenue, earnings per share (EPS) and valuation.

NewMarket has lower revenue, but higher earnings than H. B. Fuller. NewMarket is trading at a lower price-to-earnings ratio than H. B. Fuller, indicating that it is currently the more affordable of the two stocks.

Summary

H. B. Fuller beats NewMarket on 10 of the 18 factors compared between the two stocks.

About H. B. Fuller

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H.B. Fuller Company, together with its subsidiaries, formulates, manufactures, and markets adhesives, sealants, coatings, polymers, tapes, encapsulants, additives, and other specialty chemical products. It operates through three segments: Hygiene, Health and Consumable Adhesives; Engineering Adhesives; and Construction Adhesives. The Hygiene, Health and Consumable Adhesives segment produces and supplies specialty industrial adhesives, such as thermoplastic, thermoset, reactive, water-based, and solvent-based products for applications in various markets, including packaging, converting, nonwoven and hygiene, and health and beauty. The Engineering Adhesives segment produces and supplies high performance industrial adhesives comprising reactive, light cure, two-part liquids, polyurethane, silicone, film, and fast cure products to the durable assembly, performance wood and textile, transportation, electronics, clean energy, aerospace and defense, appliance, heavy machinery, and insulating glass markets. The Construction Adhesives segment provides products used for tile setting, commercial roofing, heating, ventilation, and air conditioning and insulation applications, as well as caulks and sealants for the consumer market and professional trade. The company sells its products directly to customers, as well as through distributors and retailers in the Americas, Europe, India, the Middle East, Africa, and the Asia Pacific. H.B. Fuller Company was founded in 1887 and is headquartered in Saint Paul, Minnesota.

About NewMarket

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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.