Cabot (NYSE:CBT) - Share price, News & Analysis

CBT fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	4/6
Past Performance	1/6
Financial Health	3/6
Dividends	4/6

CBT Stock Overview

Cabot Corporation operates as a specialty chemicals and performance materials company.

Rewards

Trading at 43% below our estimate of its fair value

Earnings are forecast to grow 43.58% per year

Became profitable this year

Risk Analysis

Debt is not well covered by operating cash flow

Dividend of 2.12% is not well covered by earnings

Large one-off items impacting financial results

Cabot Competitors

LyondellBasell Industries

NYSE:LYB

US$36.1b

Olin

NYSE:OLN

US$9.6b

Orion Engineered Carbons

NYSE:OEC

US$1.1b

Honeywell International

NasdaqGS:HON

US$132.0b

Price History & Performance

Summary of all time highs, changes and price drops for Cabot
Historical stock prices
Current Share Price	US$69.75
52 Week High	US$74.87
52 Week Low	US$47.59
Beta	1.37
1 Month Change	0.71%
3 Month Change	-5.87%
1 Year Change	12.41%
3 Year Change	69.50%
5 Year Change	32.05%
Change since IPO	659.18%

Recent News & Updates

May 17

Cabot (NYSE:CBT) Seems To Use Debt Quite Sensibly

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' When we think about how risky a company...

May 12

Cabot Corporation: Excellent Performance, Good Future

Cabot Corporation has outperformed comparative indexes since I wrote about the company last - some time ago. I still have a small portion of my investment. As a commodity chemicals business, Cabot is potentially slated to outperform in this environment, even with pressure from certain industries. I expect Cabot to outperform based on current macro expectations - and because of this, I'm revisiting my thesis here.

Shareholder Returns

	CBT	US Chemicals	US Market
7D	6.7%	3.1%	0.1%
1Y	12.4%	-3.3%	-12.7%

Return vs Industry: CBT exceeded the US Chemicals industry which returned -4.1% over the past year.

Return vs Market: CBT exceeded the US Market which returned -11.5% over the past year.

Price Volatility

Is CBT's price volatile compared to industry and market?
CBT volatility
CBT Average Weekly Movement	4.4%
Chemicals Industry Average Movement	7.1%
Market Average Movement	8.0%
10% most volatile stocks in US Market	17.0%
10% least volatile stocks in US Market	3.0%

Stable Share Price: CBT is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: CBT's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1882	4,500	Sean Keohane	https://www.cabotcorp.com

Cabot Corporation operates as a specialty chemicals and performance materials company. It operates through three segments: Reinforcement Materials, Performance Chemicals, and Purification Solutions. The company offers reinforcing carbons used in tires as a rubber reinforcing agent and performance additive, as well as in industrial products, such as hoses, belts, extruded profiles, and molded goods; and engineered elastomer composites.

Cabot Fundamentals Summary

How do Cabot's earnings and revenue compare to its market cap?
CBT fundamental statistics
Market Cap	US$3.98b
Earnings (TTM)	US$130.00m
Revenue (TTM)	US$3.88b

30.3x

P/E Ratio

1.0x

P/S Ratio

Is CBT overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
CBT income statement (TTM)
Revenue	US$3.88b
Cost of Revenue	US$3.05b
Gross Profit	US$829.00m
Other Expenses	US$699.00m
Earnings	US$130.00m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	2.30
Gross Margin	21.36%
Net Profit Margin	3.35%
Debt/Equity Ratio	125.4%

How did CBT perform over the long term?

See historical performance and comparison

Dividends

2.1%

Current Dividend Yield

63%

Payout Ratio

Does CBT pay a reliable dividends?

See CBT dividend history and benchmarks

When do you need to buy CBT by to receive an upcoming dividend?
Cabot dividend dates
Ex Dividend Date	May 26 2022
Dividend Pay Date	Jun 10 2022
Days until Ex dividend	6 days
Days until Dividend pay date	21 days

Does CBT pay a reliable dividends?

See CBT dividend history and benchmarks

Valuation

Is Cabot undervalued compared to its fair value and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

43.0%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: CBT ($69.75) is trading below our estimate of fair value ($122.27)

Significantly Below Fair Value: CBT is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: CBT is poor value based on its PE Ratio (30.3x) compared to the US Chemicals industry average (17.1x).

PE vs Market: CBT is poor value based on its PE Ratio (30.3x) compared to the US market (15.5x).

Price to Earnings Growth Ratio

PEG Ratio: CBT is good value based on its PEG Ratio (0.7x)

Price to Book Ratio

PB vs Industry: CBT is overvalued based on its PB Ratio (4.3x) compared to the US Chemicals industry average (2.3x).

Future Growth

How is Cabot forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

43.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: CBT's forecast earnings growth (43.6% per year) is above the savings rate (1.9%).

Earnings vs Market: CBT's earnings (43.6% per year) are forecast to grow faster than the US market (12.4% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: CBT's revenue (3.7% per year) is forecast to grow slower than the US market (7.8% per year).

High Growth Revenue: CBT's revenue (3.7% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: CBT's Return on Equity is forecast to be high in 3 years time (39.3%)

Past Performance

How has Cabot performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-13.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: CBT has a large one-off loss of $189.0M impacting its March 31 2022 financial results.

Growing Profit Margin: CBT became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: CBT's earnings have declined by 13.7% per year over the past 5 years.

Accelerating Growth: CBT has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: CBT has become profitable in the last year, making it difficult to compare its past year earnings growth to the Chemicals industry (32.3%).

Return on Equity

High ROE: CBT's Return on Equity (15.5%) is considered low.

Financial Health

How is Cabot's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: CBT's short term assets ($1.8B) exceed its short term liabilities ($1.4B).

Long Term Liabilities: CBT's short term assets ($1.8B) exceed its long term liabilities ($1.1B).

Debt to Equity History and Analysis

Debt Level: CBT's net debt to equity ratio (105.3%) is considered high.

Reducing Debt: CBT's debt to equity ratio has increased from 68.4% to 125.4% over the past 5 years.

Debt Coverage: CBT's debt is not well covered by operating cash flow (9.9%).

Interest Coverage: CBT's interest payments on its debt are well covered by EBIT (14.3x coverage).

Balance Sheet

Dividend

What is Cabot current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.12%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: CBT's dividend (2.12%) is higher than the bottom 25% of dividend payers in the US market (1.57%).

High Dividend: CBT's dividend (2.12%) is low compared to the top 25% of dividend payers in the US market (4.07%).

Stability and Growth of Payments

Stable Dividend: CBT's dividends per share have been stable in the past 10 years.

Growing Dividend: CBT's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (62.8%), CBT's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: CBT is paying a dividend but the company has no free cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

5.1yrs

Average management tenure

CEO

Sean Keohane (54 yo)

6.17yrs

Tenure

US$8,242,487

Compensation

Mr. Sean D. Keohane serves as Independent Director of The Chemours Company since May 3, 2018. He has been the Chief Executive Officer and President of Cabot Corporation since March 11, 2016. He was a membe...

CEO Compensation Analysis

Compensation vs Market: Sean's total compensation ($USD8.24M) is about average for companies of similar size in the US market ($USD6.81M).

Compensation vs Earnings: Sean's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: CBT's management team is seasoned and experienced (5.1 years average tenure).

Board Members

Experienced Board: CBT's board of directors are considered experienced (5.4 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/19 00:00
End of Day Share Price	2022/05/19 00:00
Earnings	2022/03/31
Annual Earnings	2021/09/30