(NEU) NewMarket - Ratings and Ratios

NewMarket Corporation (NYSE:NEU) is a specialty chemicals company with a deep focus on petroleum additives. These additives are mission-critical for the performance and longevity of engines, transmissions, and industrial equipment. The company serves a wide range of industries, including automotive, trucking, aerospace, and manufacturing.

Their product portfolio is extensive. Lubricant additives are their core offering, designed to reduce wear and tear in metal-to-metal applications. This includes everything from passenger vehicle engine oils to heavy-duty diesel engines in ships and locomotives. Driveline additives are another key segment, ensuring smooth operation of transmissions, axles, and hydraulic systems. Industrial additives cover hydraulic fluids, greases, and specialty products like turbine oils. They also produce fuel additives that improve refining efficiency and fuel performance across gasoline, diesel, biofuels, and other energy products.

What makes NewMarket interesting is its diversified revenue streams. Beyond additives, they market antiknock compounds to improve fuel efficiency and reduce emissions. They also engage in contracted manufacturing and manage a real estate property in Virginia. This diversification reduces dependency on any single market or customer segment.

From a financial perspective, NewMarket is a mid-sized company with a market cap of ~$5 billion. The stock trades at a P/E of ~10.8, which is reasonable for a company with its stability and market position. The price-to-book ratio is 3.4, indicating that investors value its intangible assets and franchise more than just its book value. The price-to-sales ratio of 1.79 suggests a premium for its revenue quality and margins.

Geographically, NewMarket operates in over 30 countries, with a strong presence in North America, Latin America, Europe, and Asia. This global footprint provides diversification and exposure to growth markets. The company has been around since 1887, giving it a long history of adapting to industry changes and building deep customer relationships.