Contrasting NewMarket (NEU) and Renewable Energy Group (REGI)

NewMarket (NYSE: NEU) and Renewable Energy Group (NASDAQ:REGI) are both basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, dividends, profitability, earnings, risk, analyst recommendations and institutional ownership.

Profitability

This table compares NewMarket and Renewable Energy Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NewMarket 8.34% 35.41% 12.79%
Renewable Energy Group 6.23% 29.89% 16.15%

Risk and Volatility

NewMarket has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, Renewable Energy Group has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for NewMarket and Renewable Energy Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NewMarket 0 0 0 0 N/A
Renewable Energy Group 0 1 2 0 2.67

Renewable Energy Group has a consensus price target of $15.33, suggesting a potential upside of 11.52%. Given Renewable Energy Group’s higher probable upside, analysts plainly believe Renewable Energy Group is more favorable than NewMarket.

Institutional and Insider Ownership

55.7% of NewMarket shares are owned by institutional investors. 16.9% of NewMarket shares are owned by company insiders. Comparatively, 2.0% of Renewable Energy Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

NewMarket pays an annual dividend of $7.00 per share and has a dividend yield of 1.9%. Renewable Energy Group does not pay a dividend. NewMarket has increased its dividend for 9 consecutive years.

Valuation & Earnings

This table compares NewMarket and Renewable Energy Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NewMarket $2.20 billion 1.98 $190.50 million N/A N/A
Renewable Energy Group $2.16 billion 0.25 -$79.07 million ($2.04) -6.74

NewMarket has higher revenue and earnings than Renewable Energy Group.

Summary

NewMarket beats Renewable Energy Group on 10 of the 14 factors compared between the two stocks.

NewMarket Company Profile

NewMarket Corporation, through its subsidiaries, engages in the petroleum additives businesses. It offers lubricant additives for use in various vehicle and industrial applications, such as engine oils, transmission fluids, off-road powertrain and hydraulic systems, gear oils, hydraulic oils, turbine oils, metalworking fluids, and in other applications where metal-to-metal moving parts are utilized; and engine oil, driveline, and industrial additives. The company 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 (OEMs), and individual customers. It has operations in the United States, Canada, Europe, the Asia Pacific, India, Latin America, and the Middle East. NewMarket Corporation was founded in 1887 and is headquartered in Richmond, Virginia.

Renewable Energy Group Company Profile

Renewable Energy Group, Inc. produces and sells biofuels and renewable chemicals in North America. The company operates through Biomass-Based Diesel, Services, Renewable Chemicals, and Corporate and Other segments. It acquires feedstock; and manages construction and operates biomass-based diesel production facilities. The company also produces biomass-based diesel from a range of feedstocks, including inedible corn oil, used cooking oil, and inedible animal fat, as well as soybean or canola oil; and markets, distributes, and sells biomass-based diesel and its co-products. In addition, it is involved in the purchase and resale of biomass-based diesel, petroleum-based diesel, renewable identification numbers, California Low Carbon Fuel Standard credits, and raw material feedstocks acquired from third parties; and sale of glycerin, free fatty acids, naphtha, and other co-products of the biomass-based diesel production process. Further, the company provides facility management and operational services to biomass-based diesel production facilities, as well as to other clean-tech companies; and construction management services for biomass-based diesel production facilities. Additionally, it engages in the production of renewable chemicals, advanced biofuels, and other products; and trading of petroleum-based heating oil and diesel fuel. Renewable Energy Group, Inc. was founded in 1996 and is headquartered in Ames, Iowa.

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