DAQO New Energy (NYSE:DQ – Get Free Report) and NewMarket (NYSE:NEU – Get Free Report) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.
Analyst Ratings
This is a summary of recent recommendations for DAQO New Energy and NewMarket, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| DAQO New Energy | 2 | 3 | 1 | 1 | 2.14 |
| NewMarket | 0 | 0 | 1 | 0 | 3.00 |
DAQO New Energy currently has a consensus price target of $23.59, suggesting a potential upside of 92.19%. Given DAQO New Energy’s higher probable upside, analysts clearly believe DAQO New Energy is more favorable than NewMarket.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| DAQO New Energy | $665.41 million | 1.25 | -$170.51 million | ($2.78) | -4.42 |
| NewMarket | $2.73 billion | 2.66 | $418.75 million | $43.78 | 17.98 |
NewMarket has higher revenue and earnings than DAQO New Energy. DAQO New Energy is trading at a lower price-to-earnings ratio than NewMarket, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
DAQO New Energy has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500. Comparatively, NewMarket has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500.
Insider & Institutional Ownership
47.2% of DAQO New Energy shares are owned by institutional investors. Comparatively, 61.1% of NewMarket shares are owned by institutional investors. 24.3% of DAQO New Energy shares are owned by company insiders. Comparatively, 8.6% of NewMarket shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Profitability
This table compares DAQO New Energy and NewMarket’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| DAQO New Energy | -32.92% | -3.19% | -2.94% |
| NewMarket | 15.25% | 24.12% | 12.24% |
Summary
NewMarket beats DAQO New Energy on 10 of the 14 factors compared between the two stocks.
About DAQO New Energy
Daqo New Energy Corp., together with its subsidiaries, manufactures and sells polysilicon to photovoltaic product manufacturers in the People's Republic of China. Its products are used in ingots, wafers, cells, and modules for solar power solutions. The company was formerly known as Mega Stand International Limited and changed its name to Daqo New Energy Corp. in August 2009. Daqo New Energy Corp. was founded in 2006 and is based in Shanghai, the People's Republic of China.
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.
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