Versum Materials (NYSE: VSM) and Cabot (NYSE:CBT) are both mid-cap basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.
Valuation & Earnings
This table compares Versum Materials and Cabot’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Versum Materials||$1.13 billion||3.78||$193.00 million||$1.76||22.24|
|Cabot||$2.72 billion||1.49||$241.00 million||$3.81||17.18|
This is a breakdown of recent recommendations and price targets for Versum Materials and Cabot, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Versum Materials presently has a consensus price target of $36.63, indicating a potential downside of 6.45%. Cabot has a consensus price target of $65.17, indicating a potential downside of 0.42%. Given Cabot’s stronger consensus rating and higher probable upside, analysts plainly believe Cabot is more favorable than Versum Materials.
Institutional & Insider Ownership
90.4% of Versum Materials shares are held by institutional investors. Comparatively, 84.8% of Cabot shares are held by institutional investors. 0.5% of Versum Materials shares are held by company insiders. Comparatively, 2.5% of Cabot shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
This table compares Versum Materials and Cabot’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Versum Materials pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. Cabot pays an annual dividend of $1.26 per share and has a dividend yield of 1.9%. Versum Materials pays out 11.4% 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. Versum Materials has raised its dividend for 5 consecutive years.
Cabot beats Versum Materials on 8 of the 15 factors compared between the two stocks.
Versum Materials Company Profile
Versum Materials, Inc. is a provider of solutions to the semiconductor and display industries. The Company is engaged in the development, manufacturing, transportation and handling of specialty materials. Its segments include Materials; Delivery Systems and Services (DS&S), and Corporate. The Materials segment is an integrated provider of specialty materials for the electronics industry, focusing on the integrated circuit and flat-panel display markets. The DS&S segment designs, manufactures, installs, operates, and maintains chemical and gas delivery and distribution systems for specialty gases and chemicals delivered directly to its customers’ manufacturing tools. The Company is engaged in molecular design and synthesis, purification, advanced analytics, formulation development and containers and delivery systems for the handling of high purity materials.
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.
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