Olin (NYSE:OLN – Get Free Report) and Cabot (NYSE:CBT – Get Free Report) are both mid-cap basic materials companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, earnings, institutional ownership and dividends.
Dividends
Olin pays an annual dividend of $0.80 per share and has a dividend yield of 4.0%. Cabot pays an annual dividend of $1.80 per share and has a dividend yield of 2.4%. Olin pays out 156.9% 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 23.3% of its earnings in the form of a dividend. Cabot has raised its dividend for 14 consecutive years.
Earnings & Valuation
This table compares Olin and Cabot”s gross revenue, earnings per share and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
Olin | $6.54 billion | 0.35 | $108.60 million | $0.51 | 38.84 |
Cabot | $3.99 billion | 1.01 | $380.00 million | $7.73 | 9.71 |
Cabot has lower revenue, but higher earnings than Olin. Cabot is trading at a lower price-to-earnings ratio than Olin, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Olin and Cabot’s net margins, return on equity and return on assets.
Net Margins | Return on Equity | Return on Assets | |
Olin | 0.94% | 3.13% | 0.86% |
Cabot | 11.08% | 26.76% | 11.24% |
Risk and Volatility
Olin has a beta of 1.53, meaning that its share price is 53% more volatile than the S&P 500. Comparatively, Cabot has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of current ratings and price targets for Olin and Cabot, as reported by MarketBeat.com.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
Olin | 1 | 11 | 3 | 0 | 2.13 |
Cabot | 1 | 1 | 1 | 0 | 2.00 |
Olin currently has a consensus target price of $27.80, suggesting a potential upside of 40.33%. Cabot has a consensus target price of $92.67, suggesting a potential upside of 23.44%. Given Olin’s stronger consensus rating and higher possible upside, analysts clearly believe Olin is more favorable than Cabot.
Institutional and Insider Ownership
88.7% of Olin shares are owned by institutional investors. Comparatively, 93.2% of Cabot shares are owned by institutional investors. 1.6% of Olin shares are owned by insiders. Comparatively, 3.0% of Cabot shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Summary
Cabot beats Olin on 10 of the 17 factors compared between the two stocks.
About Olin
Olin Corporation manufactures and distributes chemical products in the United States, Europe, Asia Pacific, Latin America, and Canada. It operates through three segments: Chlor Alkali Products and Vinyls; Epoxy; and Winchester. The Chlor Alkali Products and Vinyls segment offers chlorine and caustic soda, ethylene dichloride and vinyl chloride monomers, methyl chloride, methylene chloride, chloroform, carbon tetrachloride, perchloroethylene, hydrochloric acid, hydrogen, bleach products, potassium hydroxide, and chlorinated organics intermediates and solvents. The Epoxy segment provides Allylics, such as allyl chloride, epichlorohydrin, and glycerin; aromatics, including acetone, bisphenol, cumene, and phenol; liquid and solid epoxy resins; and converted epoxy resins and additives. The Winchester segment offers sporting ammunition products, including shotshells, small caliber centerfire, and rimfire ammunition products for hunters and recreational shooters, and law enforcement agencies; small caliber military ammunition products for use in infantry and mounted weapons; and industrial products comprising gauge loads and powder-actuated tool loads for maintenance applications in power and concrete industries, and powder-actuated tools in construction industry. The company markets its products through its sales force, as well as directly to various industrial customers, mass merchants, retailers, wholesalers, gun clubs, other distributors, and the U.S. Government and its prime contractors. Olin Corporation was incorporated in 1892 and is based in Clayton, Missouri.
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.
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