NewMarket Corporation (NEU) continues to see higher Zacks Consensus Estimates as it trades near a 52-week high. Analysts polled by Zacks are calling for 2009 earnings of $8.14 per share, an increase of 30% over the past 2 months.

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.

Bullish Forecasts and a Surging Share Price

The company continues to see higher Zacks Consensus Estimates as it trades near a 52-week high. During the past year, NEU soared past the major averages by more than 60%.

Analysts polled by Zacks are calling for 2009 earnings of $8.14 per share, an increase of 30% over the past 2 months.

Strong Second Quarter

In late July, the company 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.

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%.

Favorable Comparisons

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%. Earnings per share are expected to grow 15% over the next 3 – 5 years, versus the industry average expectation of 11%. With a forward P/E of 15, NEU’s valuation remains attractive despite a surging share price.

Zacks Investment Research
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