Definitive Analysis
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NewMarket Corporation (NEU)

Company Dividend Discount ModelIndustry: Chemicals - SpecialtySector: Basic Materials

Valuation Snapshot

Stable Growth$630.17 - $1,097.26$830.01
Multi-Stage$675.59 - $739.58$706.99
Blended Fair Value$768.50
Current Price$828.21
Upside-7.21%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS3.26%4.91%10.148.998.919.088.828.648.518.768.027.48
YoY Growth--12.78%0.91%-1.92%2.99%2.13%1.53%-2.94%9.31%7.16%19.13%
Dividend Yield--1.79%1.42%2.44%2.80%2.32%2.26%1.98%2.18%1.77%1.89%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)448.20
(-) Cash Dividends Paid (M)101.68
(=) Cash Retained (M)346.52
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)89.6456.0333.62
Cash Retained (M)346.52346.52346.52
(-) Cash Required (M)-89.64-56.03-33.62
(=) Excess Retained (M)256.88290.49312.90
(/) Shares Outstanding (M)9.469.469.46
(=) Excess Retained per Share27.1630.7233.08
LTM Dividend per Share10.7510.7510.75
(+) Excess Retained per Share27.1630.7233.08
(=) Adjusted Dividend37.9141.4743.84
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate2.91%3.91%4.91%
Fair Value$630.17$830.01$1,097.26
Upside / Downside-23.91%0.22%32.49%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)448.20465.71483.91502.81522.46542.87559.16
Payout Ratio22.69%36.15%49.61%63.07%76.54%90.00%92.50%
Projected Dividends (M)101.68168.35240.08317.15399.87488.58517.22

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate2.91%3.91%4.91%
Year 1 PV (M)152.83154.31155.80
Year 2 PV (M)197.84201.70205.61
Year 3 PV (M)237.25244.24251.36
Year 4 PV (M)271.55282.26293.29
Year 5 PV (M)301.20316.12331.63
PV of Terminal Value (M)5,228.815,487.865,757.06
Equity Value (M)6,389.496,686.506,994.74
Shares Outstanding (M)9.469.469.46
Fair Value$675.59$706.99$739.58
Upside / Downside-18.43%-14.64%-10.70%

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