NewMarket Corporation Increases Quarterly Dividend

Rhea-AI Summary

NewMarket Corporation (NEU) increases quarterly dividend by 11% to $2.50 per share, payable on April 1, 2024. The company operates through subsidiaries Afton Chemical Corporation, Ethyl Corporation, and American Pacific Corporation, focusing on chemical additives and specialty chemicals for petroleum, aerospace, and defense industries.

Insights

Financial Analyst

The increase in NewMarket Corporation's quarterly dividend by approximately 11% is a positive signal to investors, indicative of the company's financial health and confidence in its future cash flows. A dividend hike often reflects a company's strong profitability and a well-capitalized balance sheet. It can also be seen as a commitment to returning value to shareholders. Moreover, a consistent and increasing dividend payout can enhance the attractiveness of the stock in a portfolio, particularly for income-focused investors.

Investors may also interpret this move as NewMarket's management having a positive outlook on the sustainability of its earnings, especially given the specialized nature of its subsidiaries in chemical additives and specialty chemicals. However, it is crucial to consider the payout ratio, which is the proportion of earnings paid out as dividends, to assess whether the increased dividend is sustainable in the long term without compromising future growth or financial stability.

Market Research Analyst

From a market perspective, NewMarket's dividend increase places the company in a favorable position relative to its peers in the specialty chemicals industry. Dividend yield and growth are key factors for comparison among competitors and a substantial increase such as this could make NewMarket a more attractive option for dividend growth investors. This move might also reflect the company's strategic positioning to capitalize on the robust demand for chemical additives and specialty chemicals, sectors which are critical for various industries including petroleum, aerospace and defense.

It is important to analyze industry trends, such as raw material costs and regulatory changes, which could impact the company's margins and ability to maintain dividend growth. Additionally, the performance of the company's subsidiaries, particularly in niche markets like solid rocket motors, could significantly influence NewMarket's overall financial performance and, by extension, its dividend policy.

Economist

From an economic standpoint, the decision by NewMarket Corporation to increase its dividend may be reflective of broader economic conditions. In periods of economic expansion, companies often experience increased demand for their products, leading to higher revenues and profits, enabling them to share the gains with shareholders through dividends. Conversely, during economic downturns, companies may cut back on dividends to preserve cash.

It's also worth noting that dividends are taxed at the individual shareholder level, so the after-tax benefit of receiving dividends can vary depending on the investor's tax situation. Additionally, the Federal Reserve's interest rate policy can affect investor preference for dividend-paying stocks. In a low-interest-rate environment, such stocks can become more appealing as they offer better income potential compared to fixed-income securities like bonds.

RICHMOND, Va.--(BUSINESS WIRE)-- The Board of Directors of NewMarket Corporation (NYSE: NEU) declared a quarterly dividend in the amount of $2.50 per share on the common stock of the Corporation, an increase of $0.25, or approximately 11%, as compared to the last quarterly dividend of $2.25 per share. The dividend is payable April 1, 2024, to NewMarket shareholders of record at the close of business on March 15, 2024.

NewMarket Corporation is a holding company operating through its subsidiaries, Afton Chemical Corporation (Afton), Ethyl Corporation (Ethyl), and American Pacific Corporation (AMPAC). The Afton and Ethyl companies develop, manufacture, blend, and deliver chemical additives that enhance the performance of petroleum products. AMPAC is a manufacturer of specialty chemicals used in solid rocket motors for the aerospace and defense industries. The NewMarket family of companies has a long-term commitment to its people, to safety, to providing innovative solutions for its customers, and to making the world a better place.

Some of the information contained in this press release constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although NewMarket’s management believes its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results will not differ materially from expectations.

Factors that could cause actual results to differ materially from expectations include, but are not limited to, the availability of raw materials and distribution systems; disruptions at production facilities, including single-sourced facilities; hazards common to chemical businesses; the ability to respond effectively to technological changes in our industry; failure to protect our intellectual property rights; sudden, sharp, or prolonged raw material price increases; competition from other manufacturers; current and future governmental regulations; the loss of significant customers; failure to attract and retain a highly-qualified workforce; an information technology system failure or security breach; the occurrence or threat of extraordinary events, including natural disasters, terrorist attacks, wars and health-related epidemics; risks related to operating outside of the United States; political, economic, and regulatory factors concerning our products; the impact of substantial indebtedness on our operational and financial flexibility; the impact of fluctuations in foreign exchange rates; resolution of environmental liabilities or legal proceedings; limitation of our insurance coverage; our inability to realize expected benefits from investment in our infrastructure or from acquisitions, or our inability to successfully integrate acquisitions into our business; the underperformance of our pension assets resulting in additional cash contributions to our pension plans; and other factors detailed from time to time in the reports that NewMarket files with the Securities and Exchange Commission, including the risk factors in Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023, which is available to shareholders upon request.

You should keep in mind that any forward-looking statement made by NewMarket in the foregoing discussion speaks only as of the date on which such forward-looking statement is made. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect the Company. We have no duty to, and do not intend to, update or revise the forward-looking statements in this discussion after the date hereof, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that the events described in any forward-looking statement made in this discussion, or elsewhere, might not occur.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240221405039/en/

William J. Skrobacz

Investor Relations

Phone: 804.788.5555

Fax: 804.788.5688

Email: investorrelations@newmarket.com

Source: NewMarket Corporation

FAQ

What is the new quarterly dividend declared by NewMarket Corporation (NEU)?

The Board of Directors declared a $2.50 per share quarterly dividend, an 11% increase compared to the last dividend of $2.25 per share.

When will the dividend be payable to NewMarket Corporation (NEU) shareholders?

The dividend is payable on April 1, 2024, to shareholders of record as of March 15, 2024.

What subsidiaries operate under NewMarket Corporation (NEU)?

NewMarket Corporation operates through subsidiaries Afton Chemical Corporation, Ethyl Corporation, and American Pacific Corporation.

What industries do the subsidiaries of NewMarket Corporation (NEU) focus on?

The subsidiaries focus on developing, manufacturing, blending, and delivering chemical additives for petroleum products, as well as specialty chemicals for the aerospace and defense industries.

What is the long-term commitment of the NewMarket family of companies?

The NewMarket family of companies is committed to its people, safety, providing innovative solutions for customers, and making the world a better place.