NewMarket Corp. : NEU-US: Dividend Analysis : June 15th, 2017 (record date) : By the numbers : June 14, 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 AJ Greentech Holdings Ltd. (IOSP-US, GEVO-US, RDS.A-US, XOM-US, TREC-US, CVX-US and AJGH-US).

NewMarket Corp.’s dividend yield is 1.78 percent and its dividend payout is 31.64 percent. This compares to a peer average dividend yield of 3.64 percent and a payout level of 125.40 percent. This relatively lagging dividend performance could spur some dividend action going forward – as long as the company’s relatively strong dividend quality score of 92 out of a possible score of 100 looks sustainable.

Dividend Yield
Dividend Quality Score

Dividend Quality Overview

  • Over the last twelve months (prior to March 31, 2017), NEU-US paid a high quality dividend, which represents a yield of 1.40% 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 3.24x, provides a substantial 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 March 31, 2017), NEU-US paid a high 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 3.91x), investing cash flow (coverage of -2.06x), issuance cash flow (coverage of 0.89x) and twelve-month prior cash (coverage of 1.58x), for a total dividend coverage of 4.24x.

Dividend Coverage by Cash Flow (TTM)

These coverage ratio factors imply that the firm’s dividends are wholly paid from operating and investing cash flows net of any debt repayments, which suggests a high 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 1.78
Dividend Payout (%) 16.81 20.82 25.57 29.82 31.16 31.64

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

Company Profile

NewMarket Corp. operates as a holding company, which through its subsidiaries Afton Chemical Corporation (Afton); Ethyl Corporation(Ethyl); NewMarket Services Corporation(NewMarket Services); and NewMarket Development Corporation engages in the provision of petroleum additives. Afton develops and manufactures highly formulated lubricant and fuel additive packages; as well as markets and sells these products worldwide. Ethyl comprises of the sale of tetraethyl lead. NewMarket Development manages properties owned in Virginia. NewMarket Services provides various administrative services.The company was founded on February 11, 1887 and is headquartered in Richmond, VA.

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