NewMarket (NYSE:NEU) versus Hawkins (NASDAQ:HWKN) Financial Survey

NewMarket (NYSE:NEU) and Hawkins (NASDAQ:HWKN) are both mid-cap basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, risk, earnings, analyst recommendations and profitability.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NewMarket	17.28%	32.25%	15.10%
Hawkins	8.37%	18.35%	10.73%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for NewMarket and Hawkins, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NewMarket	0	0	1	0	3.00
Hawkins	0	2	3	0	2.60

Hawkins has a consensus price target of $162.50, suggesting a potential downside of 4.76%. Given Hawkins’ higher probable upside, analysts clearly believe Hawkins is more favorable than NewMarket.

Institutional & Insider Ownership

61.1% of NewMarket shares are held by institutional investors. Comparatively, 69.7% of Hawkins shares are held by institutional investors. 19.1% of NewMarket shares are held by company insiders. Comparatively, 4.1% of Hawkins shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares NewMarket and Hawkins”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NewMarket	$2.79 billion	2.63	$462.41 million	$50.45	15.48
Hawkins	$974.43 million	3.66	$84.35 million	$4.06	42.03

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

Dividends

NewMarket pays an annual dividend of $11.00 per share and has a dividend yield of 1.4%. Hawkins pays an annual dividend of $0.76 per share and has a dividend yield of 0.4%. NewMarket pays out 21.8% of its earnings in the form of a dividend. Hawkins pays out 18.7% 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. NewMarket has increased its dividend for 7 consecutive years and Hawkins has increased its dividend for 20 consecutive years.

Risk and Volatility

NewMarket has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500. Comparatively, Hawkins has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500.

Summary

NewMarket beats Hawkins on 9 of the 17 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 Hawkins

Hawkins, Inc. operates as a specialty chemical and ingredients company in the United States. It operates through three segments: Industrial, Water Treatment, and Health and Nutrition. The Industrial segment offers industrial chemicals, products, and services to agriculture, chemical processing, electronics, energy, food, pharmaceutical, and plating industries. This segment manufactures sodium hypochlorite and agricultural products, as well as various food-grade and pharmaceutical products, such as liquid phosphates, lactates, other blended products, and agricultural products; and receives, stores, and distributes various chemicals comprising liquid caustic soda, sulfuric acid, hydrochloric acid, urea, phosphoric acid, aqua ammonia, and potassium hydroxide. It also repackages water treatment chemicals and bulk industrial chemicals; and performs custom blending of chemicals. The Water Treatment segment provides chemicals, products, equipment, services, and solutions for potable water, municipal and industrial wastewater, industrial process water, non-residential swimming pool water, and agriculture water. The Health and Nutrition segment offers ingredient distribution, processing, and formulation solutions to manufacturers of nutraceutical, functional food and beverage, personal care, dietary supplement and other nutritional food, and health and wellness products. Its products portfolio includes minerals, vitamins and amino acids, excipients, joint products, botanicals and herbs, sweeteners, and enzymes. Hawkins, Inc. was founded in 1938 and is headquartered in Roseville, Minnesota.