Head-To-Head Review: Mosaic (NYSE:MOS) and NewMarket (NYSE:NEU)

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

Insider & Institutional Ownership

77.5% of Mosaic shares are held by institutional investors. Comparatively, 61.1% of NewMarket shares are held by institutional investors. 0.3% of Mosaic 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.

Risk and Volatility

Mosaic has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500. Comparatively, NewMarket has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500.

Earnings and Valuation

This table compares Mosaic and NewMarket”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mosaic	$12.05 billion	0.67	$540.70 million	($2.02)	-12.60
NewMarket	$2.73 billion	2.98	$418.75 million	$46.48	18.98

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

Dividends

Mosaic pays an annual dividend of $0.88 per share and has a dividend yield of 3.5%. NewMarket pays an annual dividend of $12.00 per share and has a dividend yield of 1.4%. Mosaic pays out -43.6% of its earnings in the form of a dividend. NewMarket pays out 25.8% 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. Mosaic has increased its dividend for 7 consecutive years and NewMarket has increased its dividend for 7 consecutive years. Mosaic is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Mosaic	-5.21%	3.77%	1.87%
NewMarket	15.80%	24.62%	12.51%

Analyst Recommendations

This is a summary of recent ratings and price targets for Mosaic and NewMarket, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mosaic	3	12	7	0	2.18
NewMarket	0	0	1	0	3.00

Mosaic currently has a consensus target price of $27.17, suggesting a potential upside of 6.77%. Given Mosaic’s higher probable upside, equities analysts clearly believe Mosaic is more favorable than NewMarket.

About Mosaic

The Mosaic Company, through its subsidiaries, produces and markets concentrated phosphate and potash crop nutrients in North America and internationally. The company operates through three segments: Phosphates, Potash, and Mosaic Fertilizantes. It owns and operates mines, which produce concentrated phosphate crop nutrients, such as diammonium phosphate, monoammonium phosphate, and ammoniated phosphate products; and phosphate-based animal feed ingredients primarily under the Biofos and Nexfos brand names, as well as produces a double sulfate of potash magnesia product under K-Mag brand name. The company also produces and sells potash for use in the manufacturing of mixed crop nutrients and animal feed ingredients, and for industrial use; and for use in the de-icing and as a water softener regenerant. In addition, it provides nitrogen-based crop nutrients, animal feed ingredients, and other ancillary services; and purchases and sells phosphates, potash, and nitrogen products. The company sells its products to wholesale distributors, retail chains, farmers, cooperatives, independent retailers, and national accounts. The company was incorporated in 2004 and is headquartered in Tampa, Florida.

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.