Gulf Resources (NASDAQ:GURE – Get Free Report) and Cabot (NYSE:CBT – Get Free Report) are both basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.
Profitability
This table compares Gulf Resources and Cabot’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Gulf Resources | -286.77% | -20.62% | -17.50% |
| Cabot | 7.97% | 21.33% | 9.48% |
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for Gulf Resources and Cabot, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Gulf Resources | 1 | 0 | 0 | 0 | 1.00 |
| Cabot | 1 | 4 | 1 | 0 | 2.00 |
Valuation & Earnings
This table compares Gulf Resources and Cabot”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Gulf Resources | $7.66 million | 0.87 | -$58.94 million | ($48.05) | -0.09 |
| Cabot | $3.71 billion | 1.12 | $331.00 million | $5.29 | 15.28 |
Cabot has higher revenue and earnings than Gulf Resources. Gulf Resources is trading at a lower price-to-earnings ratio than Cabot, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
3.3% of Gulf Resources shares are owned by institutional investors. Comparatively, 93.2% of Cabot shares are owned by institutional investors. 3.2% of Gulf Resources shares are owned by insiders. Comparatively, 3.1% of Cabot shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Volatility and Risk
Gulf Resources has a beta of -0.18, indicating that its stock price is 118% less volatile than the S&P 500. Comparatively, Cabot has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500.
Summary
Cabot beats Gulf Resources on 13 of the 14 factors compared between the two stocks.
About Gulf Resources
Gulf Resources, Inc., through its subsidiaries, manufactures and trades bromine and crude salt, chemical products, and natural gas in the People’s Republic of China. The company operates through four segments: Bromine, Crude salt, Chemical products, and Natural gas segments. It also provides bromine for use in bromine compounds, intermediates in organic synthesis, brominated flame retardants, fumigants, water purification compounds, dyes, medicines, and disinfectants. In addition, the company offers crude salt for use as a material in alkali and chlorine alkali production for use in the chemical, food and beverage, and other industries. In addition, it manufactures and sells chemical products for use in oil and gas field exploration, oil and gas distribution, oil field drilling, papermaking chemical agents, and inorganic chemicals, as well as materials that are used for human and animal antibiotics. The company is based in Shouguang, the People’s Republic of China.
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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