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NewMarket Corp. (NEU): Zacks Rank Buy

Michael Vodicka

NewMarket Corp. (NYSE:NEU - News) continues to trade strong, recently jumping into a new all-time high after reporting another strong quarter. With estimates on the rise and a bullish growth projection, this Zacks #1 Rank stock is a solid momentum pick out of the chemical sector.

Company Description

NewMarket Corp, through its subsidiaries, operates as a petroleum additives company in the United States and internationally. The company was founded in 1887 and has a market cap of $2.6 billion.

Chemical companies have seen big gains over the last two years as cyclical stocks moved back into favor out of the deep recession. That carried over into the company's Q3 results from early November that came in ahead of expectations and lifted shares to a new 52-week high.

Third-Quarter Results

Revenue for the period was up 18% from last year to $557 million. Earnings also came in strong at $4.06, 8% ahead of the Zacks Consensus Estimate, where the company has an 8% earnings surprise over the last 4 quarters.

The company's largest segment, Petroleum Additives, led the way, with sales up 19% from last year to $552 million.

Buying Shares Back

The company was also busy returning value to its shareholders, repurchasing 442,300 shares during the quarter.


We saw some decent movement in estimates off the good quarter, with the current year adding 26 cents to $14.00. The next-year estimate is pegged at $16.30, a bullish 9% growth projection.


With a PEG ratio of 1.44, NEU trades at a premium to the benchmark of 1 for value.

12-Month Chart

On the chart, shares rallied hard in October and November, hitting a new all-time high. Take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Whisper Trader Service.

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