Cabot (CBT) versus Versum Materials (VSM) Head to Head Review
Cabot (NYSE: CBT) and Versum Materials (NYSE:VSM) are both mid-cap basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, risk, dividends, earnings and valuation.
Earnings & Valuation
This table compares Cabot and Versum Materials’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Cabot||$2.72 billion||1.51||$241.00 million||$3.81||17.43|
|Versum Materials||$1.13 billion||3.77||$193.00 million||$1.76||22.13|
Cabot has higher revenue and earnings than Versum Materials. Cabot is trading at a lower price-to-earnings ratio than Versum Materials, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and target prices for Cabot and Versum Materials, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Cabot currently has a consensus price target of $65.17, indicating a potential downside of 1.86%. Versum Materials has a consensus price target of $36.63, indicating a potential downside of 5.97%. Given Cabot’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Cabot is more favorable than Versum Materials.
Insider & Institutional Ownership
84.8% of Cabot shares are held by institutional investors. Comparatively, 90.3% of Versum Materials shares are held by institutional investors. 2.5% of Cabot shares are held by insiders. Comparatively, 0.6% of Versum Materials shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
This table compares Cabot and Versum Materials’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Cabot pays an annual dividend of $1.26 per share and has a dividend yield of 1.9%. Versum Materials pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. Cabot pays out 33.1% of its earnings in the form of a dividend. Versum Materials pays out 11.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Cabot has raised its dividend for 6 consecutive years. Cabot is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Cabot beats Versum Materials on 9 of the 15 factors compared between the two stocks.
Cabot Corporation is a global specialty chemicals and performance materials company. The Company operates through four business segments: reinforcement materials, performance chemicals, purification solutions and specialty fluids. Reinforcement materials’ rubber grade carbon blacks are used to enhance the physical properties of the systems and applications in which they are incorporated. Its rubber blacks products are used in tires and industrial products. Performance Chemicals consists of two businesses: specialty carbons and formulations business, and metal oxides business. Purification Solutions’ activated carbon products are used for the purification of water, air and pharmaceuticals, among others, as either a colorant or a decolorizing agent in the production of food and beverage applications. Its specialty fluids segment produces and markets cesium formate as a drilling and completion fluid for use in high pressure and high temperature oil and gas well construction.
About Versum Materials
Versum Materials, Inc. is a provider of solutions to the semiconductor and display industries. The Company is engaged in the development, manufacturing, transportation and handling of specialty materials. Its segments include Materials; Delivery Systems and Services (DS&S), and Corporate. The Materials segment is an integrated provider of specialty materials for the electronics industry, focusing on the integrated circuit and flat-panel display markets. The DS&S segment designs, manufactures, installs, operates, and maintains chemical and gas delivery and distribution systems for specialty gases and chemicals delivered directly to its customers’ manufacturing tools. The Company is engaged in molecular design and synthesis, purification, advanced analytics, formulation development and containers and delivery systems for the handling of high purity materials.
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