Newmarket Corp

NEU

Industrial Organic Chemicals

Mkt Cap

$5.123B

PE

12.88

Debt

$1.279B

Cash

$117.1M

EV

$6.285B

FCF

$494M

Market Cap

$5.123B

P/E Ratio

12.88

Debt

$1.279B

Cash

$117.1M

EV

$6.285B

FCF

$494M

Charts data: {"Earnings":[{"time":"2014-12-30","value":233255000},{"time":"2015-12-30","value":238603000},{"time":"2016-12-30","value":243441000},{"time":"2017-12-30","value":190509000},{"time":"2018-12-30","value":234260000},{"time":"2019-12-30","value":253845000},{"time":"2020-12-30","value":270120000},{"time":"2021-12-30","value":190446000},{"time":"2022-12-30","value":278662000},{"time":"2023-12-30","value":387525000}],"Sales":[{"time":"2014-12-30","value":2335405000},{"time":"2015-12-30","value":2140830000},{"time":"2016-12-30","value":2049451000},{"time":"2017-12-30","value":2198404000},{"time":"2018-12-30","value":2289675000},{"time":"2019-12-30","value":2190295000},{"time":"2020-12-30","value":2010931000},{"time":"2021-12-30","value":2356110000},{"time":"2022-12-30","value":2764799000},{"time":"2023-12-30","value":2698419000}],"Net Margins":[{"time":"2014-12-30","value":0.09987775139643873},{"time":"2015-12-30","value":0.11145350167925525},{"time":"2016-12-30","value":0.11878351812265821},{"time":"2017-12-30","value":0.08665786634303795},{"time":"2018-12-30","value":0.10231146341729722},{"time":"2019-12-30","value":0.11589534743036897},{"time":"2020-12-30","value":0.13432584210994808},{"time":"2021-12-30","value":0.08083069126653679},{"time":"2022-12-30","value":0.10078924363036879},{"time":"2023-12-30","value":0.1436118705063965}],"Assets":[{"time":"2014-12-30","value":1231925000},{"time":"2015-12-30","value":1289915000},{"time":"2016-12-30","value":1416436000},{"time":"2017-12-30","value":1712154000},{"time":"2018-12-30","value":1697274000},{"time":"2019-12-30","value":1885132000},{"time":"2020-12-30","value":1933875000},{"time":"2021-12-30","value":2558436000},{"time":"2022-12-30","value":2406818000},{"time":"2023-12-30","value":2308871000}],"Stockholders Equity":[{"time":"2014-12-30","value":421041000},{"time":"2015-12-30","value":387564000},{"time":"2016-12-30","value":483251000},{"time":"2017-12-30","value":601649000},{"time":"2018-12-30","value":489907000},{"time":"2019-12-30","value":683098000},{"time":"2020-12-30","value":759824000},{"time":"2021-12-30","value":762129000},{"time":"2022-12-30","value":762407000},{"time":"2023-12-30","value":1077061000}],"ROE":[{"time":"2014-12-30","value":0.5539959291375425},{"time":"2015-12-30","value":0.6156479962019176},{"time":"2016-12-30","value":0.5037568468559817},{"time":"2017-12-30","value":0.31664475466592645},{"time":"2018-12-30","value":0.47817238782054555},{"time":"2019-12-30","value":0.37160846613516657},{"time":"2020-12-30","value":0.35550337973004276},{"time":"2021-12-30","value":0.24988683018229196},{"time":"2022-12-30","value":0.3655029400307185},{"time":"2023-12-30","value":0.35979856294118906}],"ROA":[{"time":"2014-12-30","value":0.29443350853339284},{"time":"2015-12-30","value":0.2765453537636201},{"time":"2016-12-30","value":0.25605816288205047},{"time":"2017-12-30","value":0.19669317129183472},{"time":"2018-12-30","value":0.17243768537077692},{"time":"2019-12-30","value":0.17893760224748187},{"time":"2020-12-30","value":0.1713073492340508},{"time":"2021-12-30","value":0.10075765037702722},{"time":"2022-12-30","value":0.14755540302590392},{"time":"2023-12-30","value":0.2117753655357965}]}

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, the Asia Pacific, Europe, the Middle East, Africa, and India. NewMarket Corporation was founded in 1887 and is headquartered in Richmond, Virginia.

Sector

10-Q
9/30/23
10-Q
6/30/23
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3/31/23
10-K
12/31/22
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3/31/22
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12/31/19
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3/31/19
10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Newmarket Corp

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$494M	$529.5M	$566.3M	$604.2M	$643.2M	$683.2M	$724M	$765.5M	$807.5M	$849.8M	$892.3M	$8.923B
DCF		$460.4M	$428.2M	$397.3M	$367.8M	$339.7M	$313M	$287.8M	$264M	$241.6M	$220.6M	$2.206B
Value	$5.526B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 3.7%

Earnings Stability 21%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	11%	12%	8.7%	10%	12%	13%	8.1%	10%	14%	15%
ROA	28%	26%	20%	17%	18%	17%	10%	15%	21%	16%
ROE	62%	50%	32%	48%	37%	36%	25%	37%	36%	35%

What is the average Net Margin?

The average Net Margin over the past 5 years is +11.3%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +0.31%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +16.38%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +0.09%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +36.34%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -2.05%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	3.49	2.47	15.23	6.25	2.59	3.48	50.03	25.07	1.28	2.59
Debt Equity	1.28	1.05	1.00	1.57	0.94	0.79	1.95	1.32	0.60	1.11
MIN
Graham Stability	-	-	80%	100%	100%	100%	75%	100%	100%	75%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 2.59.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 2.55.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.75.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has been increasing in past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	4%	3.3%	10%	-2.4%	1.6%
Net Income	6.9%	11%	13%	39%	4.1%
Stockholders Equity	12%	17%	12%	41%	1.7%
FCF	14%	32%	43%	1.2K%	74%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +3.34%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +1.6%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +10.59%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +4.13%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +17.06%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +1.74%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +32.46%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +73.7%.