Comparing Kuraray (OTCMKTS:KURRY) and NewMarket (NYSE:NEU)

NewMarket (NYSE:NEU) and Kuraray (OTCMKTS:KURRY) are both mid-cap materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Profitability

This table compares NewMarket and Kuraray’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NewMarket	15.80%	24.62%	12.51%
Kuraray	0.92%	5.37%	3.08%

Risk and Volatility

NewMarket has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500. Comparatively, Kuraray has a beta of 0.02, indicating that its stock price is 98% less volatile than the S&P 500.

Institutional and Insider Ownership

61.1% of NewMarket shares are held by institutional investors. 8.6% of NewMarket shares are held 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.

Valuation & Earnings

This table compares NewMarket and Kuraray”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	3.04	$418.75 million	$46.48	19.35
Kuraray	$5.41 billion	0.61	$50.04 million	$0.53	62.16

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

Analyst Recommendations

This is a summary of current recommendations and price targets for NewMarket and Kuraray, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NewMarket	0	0	1	0	3.00
Kuraray	1	0	0	0	1.00

Dividends

NewMarket pays an annual dividend of $12.00 per share and has a dividend yield of 1.3%. Kuraray pays an annual dividend of $0.85 per share and has a dividend yield of 2.6%. NewMarket pays out 25.8% of its earnings in the form of a dividend. Kuraray pays out 160.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NewMarket has increased its dividend for 7 consecutive years.

Summary

NewMarket beats Kuraray on 13 of the 16 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 Kuraray

Kuraray Co., Ltd. engages in the production and sale of resins, chemicals, fibers, activated carbon, and high-performance membranes and systems worldwide. The Vinyl Acetate segment manufactures and markets functional resins and films, including PVA, PVB and EVAL. The Isoprene segment engages in the manufacture and marketing of SEPTON thermoplastic elastomer, isoprene-related products, and GENESTAR. The Functional Materials segment manufactures and markets methacrylic resin, medical products, and carbon materials. The Fibers and Textiles segment manufactures and sells synthetic fibers and textiles, CLARINO manmade leather, non-woven fabrics, and other products. The Trading segment mainly processes and sells synthetic fibers and manmade leathers. It is also involved in the engineering business; design and construction of various plants; outsourcing of logistics services; temporary staffing/introduction business; design, manufacture, construction, and sale of water treatment equipment; travel and insurance agency business; golf course management; management of accommodation facilities and restaurants; manufacture and sale of hook-and loop fasteners and related products; manufacture and sale of dental materials; warehousing and logistics; and manufacturing and sales of methacrylic resin sheets, as well as provides consulting services. The company was incorporated in 1926 and is headquartered in Tokyo, Japan.