NewMarket Corporation (NEU) recently reported second-quarter earnings of $2.50 per share, outpacing the previous year’s $1.13 and soaring past the Zacks Consensus Estimate by 57%. Shortly after reporting, NEU declared a quarterly dividend of 25 cents per share, which translates into an industry-leading yield of 1.2%.

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.

Strong Second Quarter

The company recently reported second-quarter earnings of $2.50 per share, outpacing the previous year’s $1.13 and soaring past the Zacks Consensus Estimate by 57%.

The company noted that volumes continued to improve throughout the second quarter, and shipments in June approached the level that was typical before the market slowdown.

NewMarket also reported that its plants are running at very high rates, raw materials costs are beginning to increase and it is experiencing some tightness in raw material availability.

Shares of NEU are on rise, outpacing the market since reporting and over the long-term. The company is trading very close to a 52-week high.

Rewarding Shareholders with Income

Shortly after reporting, NEU declared a quarterly dividend of 25 cents per share, noting that is payable October 1 to shareholders of record at the close of business on September 15.

The dividend translates into an industry-leading yield of 1.2%.

Bullish Projections

The full-year Zacks Consensus Estimate for earnings jumped 27% over the past month to $7.81 per share. For 2010, analysts polled by Zacks are calling for earnings of $6.34, which is up 14% over the past month.

Strong Fundamentals

The company offers a return on equity (ROE) of 32%, well above the industry average of 9%. Its net profit margin of 6% soars past the industry average of 1.5%. With a forward P/E of 11.03, NEU’s valuation remains attractive despite a surging share price.

Zacks Investment Research
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