Critical Review: Perimeter Solutions (NYSE:PRM) vs. NewMarket (NYSE:NEU)

Perimeter Solutions (NYSE:PRM) and NewMarket (NYSE:NEU) are both mid-cap basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, analyst recommendations, valuation and profitability.

Valuation and Earnings

This table compares Perimeter Solutions and NewMarket”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Perimeter Solutions	$636.34 million	6.06	-$5.91 million	$0.42	62.06
NewMarket	$2.74 billion	2.71	$462.41 million	$47.33	16.75

NewMarket has higher revenue and earnings than Perimeter Solutions. NewMarket is trading at a lower price-to-earnings ratio than Perimeter Solutions, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

89.9% of Perimeter Solutions shares are held by institutional investors. Comparatively, 61.1% of NewMarket shares are held by institutional investors. 10.0% of Perimeter Solutions shares are held by company insiders. Comparatively, 19.1% of NewMarket shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Perimeter Solutions and NewMarket’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Perimeter Solutions	12.26%	17.33%	8.12%
NewMarket	17.28%	32.25%	15.10%

Risk & Volatility

Perimeter Solutions has a beta of 1.98, indicating that its stock price is 98% more volatile than the S&P 500. Comparatively, NewMarket has a beta of 0.46, indicating that its stock price is 54% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Perimeter Solutions and NewMarket, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Perimeter Solutions	0	1	2	1	3.00
NewMarket	0	0	1	0	3.00

Perimeter Solutions presently has a consensus price target of $26.00, indicating a potential downside of 0.25%. Given Perimeter Solutions’ higher probable upside, analysts plainly believe Perimeter Solutions is more favorable than NewMarket.

About Perimeter Solutions

Perimeter Solutions, SA manufactures and supplies firefighting products and lubricant additives in the United States, Germany, and internationally. It operates in two segments, Fire Safety and Specialty Products. The Fire Safety segment provides fire retardants and firefighting foams, as well as specialized equipment and services for federal, state, provincial, local/municipal, and commercial customers. The Specialty Products segment produces and sells Phosphorus Pentasulfide, which is primarily used in the preparation of lubricant additives, including a family of compounds called Zinc Dialkyldithiophosphates. The company offers its products under the PHOS-CHEK, FIRE-TROL, AUXQUIMIA, and SOLBERG brands. Perimeter Solutions, SA was founded in 1963 and is headquartered in Clayton, Missouri.

About NewMarket

NewMarket Corporation, through its subsidiaries, primarily engages in the manufacture and sale of petroleum additives. The company offers lubricant additives for use in various vehicle and industrial applications, including engine oils, transmission fluids, off-road powertrain and hydraulic systems, gear oils, hydraulic oils, turbine oils, and other applications where metal-to-metal moving parts are utilized; engine oil additives designed for passenger cars, motorcycles, on and off-road heavy duty commercial equipment, locomotives, and engines in ocean-going vessels; driveline additives designed for products, such as transmission fluids, axle fluids, and off-road powertrain fluids; and industrial additives designed for products for industrial applications consisting of hydraulic fluids, grease, industrial gear fluids, and industrial specialty applications, such as turbine oils. It also provides fuel additives that are used to enhance the oil refining process and the performance of gasoline, diesel, biofuels, and other fuels to industry, government, original equipment manufacturers, and individual customers. In addition, the company engages in the marketing of antiknock compounds, as well as contracted manufacturing and services activities; and owns and manages a real property in Virginia. It operates in North America, Latin America, Asia Pacific, Europe, the Middle East, Africa, and India. NewMarket Corporation was founded in 1887 and is headquartered in Richmond, Virginia.