Arkema (OTCMKTS:ARKAY) & Cabot (NYSE:CBT) Financial Analysis

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

Volatility & Risk

Arkema has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, Cabot has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Arkema and Cabot, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arkema	2	2	1	0	1.80
Cabot	2	2	1	0	1.80

Cabot has a consensus target price of $63.67, suggesting a potential upside of 0.60%. Given Cabot’s higher possible upside, analysts plainly believe Cabot is more favorable than Arkema.

Earnings and Valuation

This table compares Arkema and Cabot”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arkema	$10.33 billion	0.45	$383.06 million	$2.08	29.33
Cabot	$3.71 billion	0.90	$380.00 million	$6.01	10.53

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

Dividends

Arkema pays an annual dividend of $3.02 per share and has a dividend yield of 5.0%. Cabot pays an annual dividend of $1.80 per share and has a dividend yield of 2.8%. Arkema pays out 145.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cabot pays out 30.0% of its earnings in the form of a dividend. Cabot has increased its dividend for 14 consecutive years.

Insider & Institutional Ownership

93.2% of Cabot shares are owned by institutional investors. 3.0% of Cabot shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Arkema	2.41%	6.36%	3.31%
Cabot	11.14%	25.68%	10.92%

Summary

Cabot beats Arkema on 10 of the 15 factors compared between the two stocks.

About Arkema

Arkema S.A. manufactures and sells specialty chemicals and advanced materials worldwide. The company operates in three segments: Adhesive Solutions, Advanced Materials and Coating Solutions, and Intermediates. The Adhesive Solutions segment provides solutions for construction, renovation of buildings, DIY, durable goods, and packaging and non-woven applications; and supplies technologies used in building activities for businesses and individuals, including sealants, tiles, flooring adhesives and waterproofing systems, and technologies used in industry, which include automotive, textiles, glazing, flexible and rigid packaging, and hygiene markets. This segment also offers performance polymers, such as specialty polyamides, PVDF, polyimides, fluorospecialties, and polyetherketoneketone; and performance additives which includes molecular sieves, organic peroxides, thiochemicals, and hydrogen peroxide. The Advance Materials and Coating Solutions segment offers coating solutions, including comprising EU/US acrylics and coating resins; coating additives, such as sartomer photocure resins and coatex rheology additives. This segment also provides decorative paints, industrial coatings, and adhesives; and solutions for applications in the paper, superabsorbent, water treatment and oil and gas extraction, and 3D printing and electronics industries. The Intermediates segment provides fluorogases and acrylics; and industrial intermediate chemicals used in construction, refrigeration and air conditioning, automotive, coatings, and water treatment sectors. Arkema S.A. was incorporated in 2003 and is headquartered in Colombes, France.

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.