NYSE:CBT

Stock Analysis Report

Executive Summary

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

Rewards

PE ratio (19.5x) is below the Chemicals industry average (22.4x)

Earnings are forecast to grow 17.84% per year

Earnings grew by 64.9% over the past year

Pays a high and reliable dividend of 3.28%

Risk Analysis

Has a high level of debt



Snowflake Analysis

Solid track record established dividend payer.


Similar Companies

Orion Engineered Carbons

NYSE:OEC

Share Price & News

How has Cabot's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CBT has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.3%

CBT

-0.1%

US Chemicals

0.5%

US Market


1 Year Return

-9.2%

CBT

-5.8%

US Chemicals

20.3%

US Market

Return vs Industry: CBT underperformed the US Chemicals industry which returned -5.8% over the past year.

Return vs Market: CBT underperformed the US Market which returned 20.3% over the past year.


Shareholder returns

CBTIndustryMarket
7 Day-0.3%-0.1%0.5%
30 Day-0.07%-0.4%2.0%
90 Day-8.3%1.7%9.4%
1 Year-6.9%-9.2%8.0%-5.8%22.8%20.3%
3 Year-19.2%-24.8%29.3%4.2%50.1%40.4%
5 Year8.0%-4.0%38.6%8.5%73.1%54.1%

Price Volatility Vs. Market

How volatile is Cabot's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

19.76x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: CBT ($42.63) is trading above our estimate of fair value ($39.05)

Significantly Below Fair Value: CBT is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: CBT is good value based on its PE Ratio (19.5x) compared to the Chemicals industry average (22.4x).

PE vs Market: CBT is poor value based on its PE Ratio (19.5x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: CBT is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: CBT is overvalued based on its PB Ratio (2.4x) compared to the US Chemicals industry average (2.1x).


Next Steps

Future Growth

How is Cabot forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

17.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CBT's forecast earnings growth (17.8% per year) is above the savings rate (1.7%).

Earnings vs Market: CBT's earnings (17.8% per year) are forecast to grow faster than the US market (14.2% per year).

High Growth Earnings: CBT's earnings are forecast to grow, but not significantly.

Revenue vs Market: CBT's revenue (3.2% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: CBT's revenue (3.2% 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 (20.8%)


Next Steps

Past Performance

How has Cabot performed over the past 5 years?

26.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CBT has high quality earnings.

Growing Profit Margin: CBT's current net profit margins (3.9%) are higher than last year (2.3%).


Past Earnings Growth Analysis

Earnings Trend: CBT's earnings have grown significantly by 26% per year over the past 5 years.

Accelerating Growth: CBT's earnings growth over the past year (64.9%) exceeds its 5-year average (26% per year).

Earnings vs Industry: CBT earnings growth over the past year (64.9%) exceeded the Chemicals industry -15.9%.


Return on Equity

High ROE: CBT's Return on Equity (13.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Cabot's financial position?


Financial Position Analysis

Short Term Liabilities: CBT's short term assets ($1.2B) exceed its short term liabilities ($574.0M).

Long Term Liabilities: CBT's short term assets ($1.2B) do not cover its long term liabilities ($1.4B).


Debt to Equity History and Analysis

Debt Level: CBT's debt to equity ratio (93.2%) is considered high.

Reducing Debt: CBT's debt to equity ratio has increased from 59.9% to 93.2% over the past 5 years.

Debt Coverage: CBT's debt is well covered by operating cash flow (47.2%).

Interest Coverage: CBT's interest payments on its debt are well covered by EBIT (7x coverage).


Balance Sheet

Inventory Level: CBT has a high level of physical assets or inventory.

Debt Coverage by Assets: CBT's debt is covered by short term assets (assets are 1.1x debt).


Next Steps

Dividend

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

3.23%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Cabot before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company3.2%marketbottom25%1.4%markettop25%3.7%industryaverage2.2%forecastin3Years3.6%

Current dividend yield vs market & industry

Notable Dividend: CBT's dividend (3.28%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: CBT's dividend (3.28%) is low compared to the top 25% of dividend payers in the US market (3.73%).


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.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (63%), CBT's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CBT's dividends in 3 years are forecast to be well covered by earnings (29.7% payout ratio).


Next Steps

Management

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

2.8yrs

Average management tenure


CEO

Sean Keohane (52yo)

3.9yrs

Tenure

US$6,679,379

Compensation

Mr. Sean D. Keohane serves as Director of Chemours Company since May 3, 2018. He has been the Chief Executive Officer and President of Cabot Corporation since March 11, 2016. Mr. Keohane served as an Execu ...


CEO Compensation Analysis

Compensation vs Market: Sean's total compensation ($USD6.68M) is above average for companies of similar size in the US market ($USD3.82M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Sean Keohane
President3.9yrsUS$6.68m0.17% $4.2m
Erica McLaughlin
Senior VP & CFO1.8yrsUS$1.57m0.014% $336.7k
Karen Kalita
Senior VP & General Counsel1.1yrsUS$1.32m0.0051% $125.9k
Patrick Prevost
Advisor & Director12.1yrsUS$211.20k0.38% $9.3m
Hobart Kalkstein
Senior VP3.8yrsUS$1.58m0.080% $2.0m
Lisa Dumont
Controller & Principal Accounting Officer0.08yrsno data0.011% $268.7k
Patricia Hubbard
Senior VP & CTO2yrsno datano data
Steven Delahunt
VP of Investor Relations & Treasurer3.6yrsno datano data
Vanessa Craigie
Corporate Communications Director0yrsno datano data
Arthur Wood
Senior VP & Chief Human Resources Officer2.8yrsno datano data

2.8yrs

Average Tenure

49yo

Average Age

Experienced Management: CBT's management team is considered experienced (2.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Sean Keohane
President3.9yrsUS$6.68m0.17% $4.2m
Patrick Prevost
Advisor & Director12.1yrsUS$211.20k0.38% $9.3m
John O'Brien
Independent Non-Executive Director30.1yrsUS$223.49k0.095% $2.3m
Mark Wrighton
Independent Director23.1yrsUS$215.50k0.083% $2.0m
Matthias Wolfgruber
Independent Director5.4yrsUS$219.96kno data
Juan Enriquez
Independent Director14.9yrsUS$212.04k0.0037% $91.1k
Cynthia Arnold
Independent Director2.1yrsUS$207.99k0.012% $298.9k
William Kirby
Independent Director7.6yrsUS$217.21kno data
Sue Rataj
Independent Non-Executive Chairman1.9yrsUS$320.49k0.033% $815.3k
Michael Morrow
Independent Director2.4yrsUS$229.28k0.0035% $86.6k

6.5yrs

Average Tenure

63.5yo

Average Age

Experienced Board: CBT's board of directors are considered experienced (6.5 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: CBT insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

Cabot Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Cabot Corporation
  • Ticker: CBT
  • Exchange: NYSE
  • Founded: 1882
  • Industry: Commodity Chemicals
  • Sector: Materials
  • Market Cap: US$2.454b
  • Shares outstanding: 56.68m
  • Website: https://www.cabotcorp.com

Number of Employees


Location

  • Cabot Corporation
  • Two Seaport Lane
  • Suite 1300
  • Boston
  • Massachusetts
  • 2210
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CBTNYSE (New York Stock Exchange)YesCommon StockUSUSDAug 1968
CBTDB (Deutsche Boerse AG)YesCommon StockDEEURAug 1968

Biography

Cabot Corporation operates as a specialty chemicals and performance materials company. The company offers rubber grade carbon blacks 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 compounds of carbon black and rubber. It also provides specialty grades of carbon black used in inks, coatings, plastics, adhesives, toners, batteries, and displays applications; masterbatch and conductive compound products for use in automotive, industrial, packaging, infrastructure, agriculture, consumer products, and electronics industries; inkjet colorants used in the inkjet printing applications; fumed silica used in adhesives, sealants, cosmetics, batteries, inks, toners, silicone elastomers, coatings, polishing slurries, and pharmaceuticals; fumed alumina used in various products, including inkjet media, lighting, coatings, cosmetics, and polishing slurries; and aerogel, a hydrophobic, silica-based particle for use in various thermal insulation and specialty chemical applications. In addition, the company offers activated carbon products used for the purification of water, air, food and beverages, pharmaceuticals, and other liquids and gases; and activated carbon solutions for activated carbon injection in coal-fired utilities, mobile water filter units, and carbon reactivation services. Cabot Corporation sells its products primarily through distributors and sales representatives in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. Cabot Corporation was founded in 1882 and is headquartered in Boston, Massachusetts. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/21 00:30
End of Day Share Price2020/02/20 00:00
Earnings2019/12/31
Annual Earnings2019/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.