Cabot (CBT) & Orion Engineered Carbons S.A (OEC) Critical Review
Cabot (NYSE: CBT) and Orion Engineered Carbons S.A (NYSE:OEC) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, profitability, risk, dividends, earnings and analyst recommendations.
This is a summary of current ratings and price targets for Cabot and Orion Engineered Carbons S.A, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Orion Engineered Carbons S.A||0||1||4||0||2.80|
Cabot pays an annual dividend of $1.26 per share and has a dividend yield of 2.1%. Orion Engineered Carbons S.A pays an annual dividend of $0.81 per share and has a dividend yield of 3.3%. Cabot pays out 33.1% of its earnings in the form of a dividend. Orion Engineered Carbons S.A pays out 64.3% 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 increased its dividend for 5 consecutive years.
Insider and Institutional Ownership
84.9% of Cabot shares are owned by institutional investors. Comparatively, 54.6% of Orion Engineered Carbons S.A shares are owned by institutional investors. 2.5% of Cabot shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This table compares Cabot and Orion Engineered Carbons S.A’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Orion Engineered Carbons S.A||5.50%||137.36%||8.91%|
Valuation & Earnings
This table compares Cabot and Orion Engineered Carbons S.A’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Cabot||$2.72 billion||1.38||$241.00 million||$3.81||15.88|
|Orion Engineered Carbons S.A||$1.14 billion||1.26||$49.38 million||$1.26||19.25|
Cabot has higher revenue and earnings than Orion Engineered Carbons S.A. Cabot is trading at a lower price-to-earnings ratio than Orion Engineered Carbons S.A, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Cabot has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500. Comparatively, Orion Engineered Carbons S.A has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500.
Cabot beats Orion Engineered Carbons S.A on 11 of the 16 factors compared between the two stocks.
Cabot Company Profile
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.
Orion Engineered Carbons S.A Company Profile
Orion Engineered Carbons S.A. is a producer of carbon black. The Company operates through two segments: Specialty Carbon Black and Rubber Carbon Black. The Specialty Carbon Black segment is engaged in the production of specialty carbon black. The Rubber Carbon Black segment is involved in the production of rubber carbon black. As of December 31, 2016, it operated a diversified carbon black business with over 280 specialty carbon black grades and approximately 80 rubber carbon black grades. Carbon black is used as a pigment and as a performance additive in coatings, polymers, printing and special applications (specialty carbon black), and in the reinforcement of rubber in tires and mechanical rubber goods (rubber carbon black). As of December 31, 2016, it operated a global platform of 13 production facilities in Europe, North and South America, Asia and South Africa and three sales companies, as well as one jointly-owned production plant in Germany.
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