NewMarket Corp. : NEU-US: Dividend Analysis : December 15th, 2017 (record date) : By the numbers : December 18, 2017

Our analysis is based on comparing NewMarket Corp. with the following peers – Innospec Inc., Gevo, Inc., Royal Dutch Shell Plc Sponsored ADR Class A, Exxon Mobil Corporation, Trecora Resources, Chevron Corporation and Sino United Worldwide Consolidated Ltd (IOSP-US, GEVO-US, RDS.A-US, XOM-US, TREC-US, CVX-US and SUIC-US).

NewMarket Corp.’s dividend yield is 1.83 percent and its dividend payout is 35.00 percent. This compares to a peer average dividend yield of 2.72 percent and a payout level of 67.14 percent. This relatively lagging dividend performance could spur some dividend action going forward – except the company’s current dividend quality score of 50 out of a possible score of 100 is only about average.

Dividend Yield
Dividend Quality Score

Dividend Quality Overview

  • Over the last twelve months (prior to September 30, 2017), NEU-US paid a low quality dividend, which represents a yield of 1.79% at the current price.
  • Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 4 were high quality and 1 was medium quality.
  • The ending cash balance, with a dividend coverage of 1.29x, provides a moderate cushion in case of a significant reduction of cash flows in the future.
Dividend Quality Score Vs Dividend Yield

Quadrant label definitions. Hover to know more

High Score;High Yield, High Score;Low Yield, Low Score;Low Yield, Low Score;High Yield

Dividend Coverage

Over the last twelve months (prior to September 30, 2017), NEU-US paid a low quality dividend.

The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 3.22x), investing cash flow (coverage of -4.29x), issuance cash flow (coverage of 1.08x) and twelve-month prior cash (coverage of 2.31x), for a total dividend coverage of 2.29x.

Dividend Coverage by Cash Flow (TTM)

These coverage ratio factors imply that the firm had to dip into the beginning cash balance to pay the dividend, which suggests a low dividend quality.

Dividend History

Item 2012-12-31 2013-12-31 2014-12-31 2015-12-31 2016-12-31 Latest
Dividend Yield (%) 10.68 1.15 1.18 1.56 1.51 1.83
Dividend Payout (%) 16.81 20.82 25.57 29.82 31.16 35

A complete list of metrics and analysis is available on the company page.

Company Profile

NewMarket Corp. operates as a holding company. The company through its subsidiaries, engages in the provision of petroleum additives. It develops and manufactures lubricant and fuel additive packages, as well as markets and sells these products. The company also comprises of the sale of tetraethyl lead. It manages properties owned in Virginia and also provides various administrative services.The company was founded on February 11, 1887 and is headquartered in Richmond, VA.


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