Head to Head Comparison: Cabot (CBT) & KMG Chemicals (KMG)
KMG Chemicals (NYSE: KMG) and Cabot (NYSE:CBT) are both basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, analyst recommendations, profitability, dividends and valuation.
This is a summary of current recommendations and price targets for KMG Chemicals and Cabot, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Insider & Institutional Ownership
56.2% of KMG Chemicals shares are owned by institutional investors. Comparatively, 84.9% of Cabot shares are owned by institutional investors. 6.1% of KMG Chemicals shares are owned by company insiders. Comparatively, 2.5% of Cabot shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Volatility & Risk
KMG Chemicals has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500. Comparatively, Cabot has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500.
Earnings and Valuation
This table compares KMG Chemicals and Cabot’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|KMG Chemicals||$333.44 million||2.47||$23.63 million||$1.92||27.92|
|Cabot||$2.72 billion||1.38||$241.00 million||$3.81||15.88|
Cabot has higher revenue and earnings than KMG Chemicals. Cabot is trading at a lower price-to-earnings ratio than KMG Chemicals, indicating that it is currently the more affordable of the two stocks.
KMG Chemicals pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. Cabot pays an annual dividend of $1.26 per share and has a dividend yield of 2.1%. KMG Chemicals pays out 6.3% of its earnings in the form of a dividend. Cabot pays out 33.1% 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. KMG Chemicals has raised its dividend for 5 consecutive years.
This table compares KMG Chemicals and Cabot’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Cabot beats KMG Chemicals on 9 of the 17 factors compared between the two stocks.
About KMG Chemicals
KMG Chemicals, Inc. manufactures, formulates and globally distributes specialty chemicals. The Company operates businesses selling electronic chemicals, industrial wood treating chemicals, and industrial valve lubricants and sealants. The Company operates through two segments: Electronic chemicals and Other chemicals. The Company operates through its subsidiaries, KMG Electronic Chemicals, Inc. (KMG EC), KMG-Bernuth, Inc. (KMG Bernuth) and KMG Val-Tex, LLC (Val-Tex). The Company’s Electronic chemicals business sells high purity and ultra-purity wet process chemicals primarily to the semiconductor industry. The Company’s Other chemicals segment includes its industrial lubricants business and wood treating chemicals business. The Company’s products sulfuric, phosphoric, nitric and hydrofluoric acids, ammonium hydroxide, hydrogen peroxide, isopropyl alcohol, other specialty organic solvents and various blends of chemicals.
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.
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