Critical Comparison: Chemours (NYSE:CC) & Cabot (NYSE:CBT)

Cabot (NYSE:CBT) and Chemours (NYSE:CC) are both mid-cap basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Institutional & Insider Ownership

93.2% of Cabot shares are owned by institutional investors. Comparatively, 76.3% of Chemours shares are owned by institutional investors. 3.0% of Cabot shares are owned by company insiders. Comparatively, 0.5% of Chemours shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Cabot and Chemours”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cabot	$3.99 billion	1.00	$380.00 million	$7.65	9.85
Chemours	$5.78 billion	0.41	$86.00 million	($2.80)	-5.69

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

Volatility and Risk

Cabot has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, Chemours has a beta of 1.65, indicating that its stock price is 65% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Cabot and Chemours, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cabot	1	1	1	0	2.00
Chemours	0	4	5	0	2.56

Cabot presently has a consensus target price of $92.33, suggesting a potential upside of 22.59%. Chemours has a consensus target price of $17.63, suggesting a potential upside of 10.61%. Given Cabot’s higher possible upside, research analysts plainly believe Cabot is more favorable than Chemours.

Dividends

Cabot pays an annual dividend of $1.80 per share and has a dividend yield of 2.4%. Chemours pays an annual dividend of $0.35 per share and has a dividend yield of 2.2%. Cabot pays out 23.5% of its earnings in the form of a dividend. Chemours pays out -12.5% 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.

Profitability

This table compares Cabot and Chemours’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cabot	11.14%	25.68%	10.92%
Chemours	-7.19%	35.14%	2.45%

Summary

Cabot beats Chemours on 11 of the 17 factors compared between the two stocks.

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.

About Chemours

The Chemours Company provides performance chemicals in North America, the Asia Pacific, Europe, the Middle East, Africa, and Latin America. It operates through three segments: Titanium Technologies, Thermal & Specialized Solutions, and Advanced Performance Materials. The Titanium Technologies segment provides TiO2 pigment under the Ti-Pure brand for delivering whiteness, brightness, opacity, durability, efficiency, and protection in various of applications, such as architectural and industrial coatings, flexible and rigid plastic packaging, polyvinylchloride, laminate papers used for furniture and building materials, coated paper, and coated paperboard used for packaging. The Thermal & Specialized Solutions segment offers of refrigerants, thermal management solutions, propellants, foam blowing agents, and specialty solvents. The Advanced Performance Materials segment products portfolio includes various industrial resins, specialty products, membranes, and coatings for electronics, communications, transportation, wire and cable, energy, oil and gas, and medical, and other applications under the eflon, Viton, Krytox, and Nafion brands. The company sells its products through direct and indirect channels, as well as through a network of resellers and distributors. The Chemours Company was incorporated in 2014 and is headquartered in Wilmington, Delaware.