NewMarket Corporation

NewMarket Corporation (NEU - Snapshot Report) saw robust third-quarter results and hiked its dividend. Earnings per share of $3.88 soared past the Zacks Consensus Estimate by 81% and came in well above last year’s $1.07. NewMarket’s dividend of 37.5 cents is 12.5 cents higher than the previous quarterly dividend.

Company Description

NewMarket Corporation develops, manufactures, blends, and delivers chemical additives that enhance the performance of petroleum products. From custom-formulated chemical blends to market-general additive components, the NewMarket family of companies provides the world with the technology to make fuels burn cleaner, engines run smoother and machines last longer.

A Solid Quarter and Higher Income

The company saw robust third-quarter results and hiked its dividend. Earnings per share of $3.88 soared past the Zacks Consensus Estimate by 81% and came in well above last year’s $1.07.

NewMarket noted that its liquidity position improved significantly during the first nine months of this year with cash increasing to $133.8 million, compared to $21.8 million at the end of 2008

NewMarket also boosted its dividend by 12.5 cents to 37.5 cents, noting that it is payable January 1 to shareholders of record at the close of business on December 15.

Higher Estimates and Solid Momentum

The Zacks Consensus Estimates have been bullish. The current full-year earnings forecast of $9.99 per share increased from $8.37 over the past 60 days.

For 2010, analysts polled by Zacks are calling for earnings of $8.81 per share, versus the 2 months-ago projection of $6.96.

Shares of NEU have outpaced the market by more than 150% over the past year. Since reporting the strong results, NEU has outpaced the market by 20%.

Favorable Comparisons

The company offers a return on equity (ROE) of 42%, well above the industry average of 9%. Its net profit margin of 9% soars past the industry average of 2.2%. Earnings per share are expected to grow 15% over the next 3 – 5 years, versus the industry average expectation of 9%.

Alex Kolb is the Growth & Income Stock Strategist for Zacks.com. He also writes the popular daily commentary column for theZacksElite.com service.

Read the full analyst report on NEU