Comparing NewMarket (NEU) & Green Plains (GPRE)

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

Institutional and Insider Ownership

55.7% of NewMarket shares are held by institutional investors. 5.9% of Green Plains shares are held by company insiders. Comparatively, 16.9% of NewMarket shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Green Plains has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500. Comparatively, NewMarket has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.

Dividends

Green Plains pays an annual dividend of $0.48 per share and has a dividend yield of 2.3%. NewMarket pays an annual dividend of $7.00 per share and has a dividend yield of 1.9%. Green Plains pays out -55.8% of its earnings in the form of a dividend. NewMarket has raised its dividend for 9 consecutive years.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Green Plains and NewMarket, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Green Plains 0 0 5 0 3.00
NewMarket 0 0 0 0 N/A

Green Plains currently has a consensus target price of $26.20, suggesting a potential upside of 25.06%. Given Green Plains’ higher probable upside, research analysts clearly believe Green Plains is more favorable than NewMarket.

Profitability

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

Net Margins Return on Equity Return on Assets
Green Plains 1.08% -5.27% -2.07%
NewMarket 8.34% 35.41% 12.79%

Earnings & Valuation

This table compares Green Plains and NewMarket’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Green Plains $3.60 billion 0.24 $61.06 million ($0.86) -24.36
NewMarket $2.20 billion 2.03 $190.50 million N/A N/A

NewMarket has lower revenue, but higher earnings than Green Plains.

Summary

NewMarket beats Green Plains on 9 of the 15 factors compared between the two stocks.

About Green Plains

Green Plains Inc. produces, markets, and distributes ethanol in the United States and internationally. The company operates through four segments: Ethanol Production; Agribusiness and Energy Services; Food and Ingredients; and Partnership. The Ethanol Production segment produces and sells ethanol, distiller grains, and corn oil. The Agribusiness and Energy Services segment engages in the grain procurement, handling, and storage activities; and commodity marketing business, which purchases, markets, sells, and distributes ethanol, distiller grains, and corn oil, as well as crude oil, grain, natural gas, and other commodities in various markets. This segment also provides grain drying and storage services to grain producers. The Food and Ingredients segment purchases and sells feeder cattle to meat processors; and produces and sells white distilled vinegar and various specialty vinegar, such as balsamic, red wine, white wine, cider, and other varietals primarily to the food industry participants, including branded food companies, private label food manufacturers, and companies serving the foodservice channel, as well as for retail and industrial uses. This segment also produces, trades in, and sells corn and soybean oil. The Partnership segment offers fuel storage and transportation services. As of December 31, 2017, this segment owned 39 ethanol storage facilities; 8 fuel terminal facilities; and approximately a fleet of 3,500 leased railcars. The company was formerly known as Green Plains Renewable Energy, Inc. and changed its name to Green Plains Inc. in May 2014. Green Plains Inc. was founded in 2004 and is headquartered in Omaha, Nebraska.

About NewMarket

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.

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