DuPont de Nemours (NYSE:DD) & Cabot (NYSE:CBT) Critical Survey

DuPont de Nemours (NYSE:DD) and Cabot (NYSE:CBT) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, risk, institutional ownership and analyst recommendations.

Profitability

This table compares DuPont de Nemours and Cabot’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DuPont de Nemours	-6.17%	7.81%	4.98%
Cabot	8.91%	24.55%	10.57%

Analyst Recommendations

This is a breakdown of current ratings and price targets for DuPont de Nemours and Cabot, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DuPont de Nemours	2	3	10	0	2.53
Cabot	2	2	1	0	1.80

DuPont de Nemours presently has a consensus price target of $43.69, suggesting a potential upside of 6.51%. Cabot has a consensus price target of $66.33, suggesting a potential upside of 1.47%. Given DuPont de Nemours’ stronger consensus rating and higher possible upside, research analysts clearly believe DuPont de Nemours is more favorable than Cabot.

Institutional and Insider Ownership

74.0% of DuPont de Nemours shares are held by institutional investors. Comparatively, 93.2% of Cabot shares are held by institutional investors. 0.6% of DuPont de Nemours shares are held by insiders. Comparatively, 3.0% of Cabot shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

DuPont de Nemours pays an annual dividend of $0.80 per share and has a dividend yield of 2.0%. Cabot pays an annual dividend of $1.80 per share and has a dividend yield of 2.8%. DuPont de Nemours pays out -43.5% of its earnings in the form of a dividend. Cabot pays out 30.0% 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 14 consecutive years. Cabot is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

DuPont de Nemours has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, Cabot has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500.

Earnings & Valuation

This table compares DuPont de Nemours and Cabot”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DuPont de Nemours	$12.39 billion	1.39	$703.00 million	($1.84)	-22.29
Cabot	$3.71 billion	0.93	$331.00 million	$6.01	10.88

DuPont de Nemours has higher revenue and earnings than Cabot. DuPont de Nemours is trading at a lower price-to-earnings ratio than Cabot, indicating that it is currently the more affordable of the two stocks.

Summary

Cabot beats DuPont de Nemours on 9 of the 17 factors compared between the two stocks.

About DuPont de Nemours

DuPont de Nemours, Inc. provides technology-based materials and solutions in the United States, Canada, the Asia Pacific, Latin America, Europe, the Middle East, and Africa. It operates through Electronics & Industrial, Water & Protection, and Corporate & Other segments. The Electronics & Industrial segment supplies materials and solutions for the fabrication of semiconductors and integrated circuits. This segment also provides semiconductor and advanced packaging materials; dielectric and metallization solutions for chip packaging; and silicones for light emitting diode packaging and semiconductor applications; permanent and process chemistries for the fabrication of printed circuit boards to include laminates and substrates, and electroless and electrolytic metallization solutions, and electromagnetic shielding and thermal management solutions, as well as patterning solutions, and materials and metallization processes for metal finishing, decorative, and industrial applications. In addition, it offers various materials to manufacture rigid and flexible displays for organic light emitting diode, and other display applications; provides high performance parts, and specialty silicone elastomers, and lubricants to automotive, aerospace, electronics, industrial, and healthcare markets; and photopolymer plates and platemaking systems used in flexographic printing, and digital inks for textile, commercial, and home-office printing applications. The Water & Protection segment provides engineered products and integrated systems for worker safety, water purification and separation, transportation, energy, medical packaging and building materials. The Corporate & Other segment offers auto adhesives and fluids; Multibase; and Tedlar products. The company was formerly known as DowDuPont Inc. and changed its name to DuPont de Nemours, Inc. in June 2019. DuPont de Nemours, Inc. was incorporated in 2015 and is headquartered in Wilmington, Delaware.

About Cabot

Cabot Corporation operates as a specialty chemicals and performance materials company. The company operates through two segments, Reinforcement Materials and Performance Chemicals. It offers reinforcing carbons that are 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 solutions. The company also provides specialty carbons for use in inks, coatings, plastics, adhesives, toners, batteries, and displays; conductive additives and fumed alumina used in lead acid and lithium-ion batteries for electric vehicles; fumed silica used in adhesives, sealants, cosmetics, batteries, inks, toners, silicone elastomers, coatings, polishing slurries, and pharmaceuticals; and fumed alumina for use in various products, including inkjet media, lighting, coatings, cosmetics, and polishing slurries. In addition, it offers aerogel, a hydrophobic, silica-based particle to use in various thermal insulation and specialty chemical applications; masterbatch and conductive compound products that are used in automotive, industrial, packaging, infrastructure, agriculture, consumer products, and electronics industries; and inkjet colorants for inkjet printing applications. The company sells its products 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.