Cabot (NYSE: CBT) and Platform Specialty Products (NYSE:PAH) 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 dividends, earnings, risk, profitability, analyst recommendations, institutional ownership and valuation.
Cabot pays an annual dividend of $1.26 per share and has a dividend yield of 2.3%. Platform Specialty Products does not pay a dividend. Cabot pays out 36.7% of its earnings in the form of a dividend. Cabot has increased its dividend for 6 consecutive years.
Institutional & Insider Ownership
87.2% of Cabot shares are owned by institutional investors. Comparatively, 92.2% of Platform Specialty Products shares are owned by institutional investors. 2.2% of Cabot shares are owned by company insiders. Comparatively, 5.2% of Platform Specialty Products shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Cabot and Platform Specialty Products’ 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||1.22||$241.00 million||$3.43||15.68|
|Platform Specialty Products||$3.78 billion||0.71||-$296.20 million||$0.76||12.28|
Cabot has higher earnings, but lower revenue than Platform Specialty Products. Platform Specialty Products is trading at a lower price-to-earnings ratio than Cabot, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Cabot has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500. Comparatively, Platform Specialty Products has a beta of 3.14, suggesting that its share price is 214% more volatile than the S&P 500.
This table compares Cabot and Platform Specialty Products’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Platform Specialty Products||-7.84%||7.69%||2.21%|
This is a breakdown of current recommendations and price targets for Cabot and Platform Specialty Products, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Platform Specialty Products||0||2||3||0||2.60|
Cabot presently has a consensus price target of $72.83, suggesting a potential upside of 35.40%. Platform Specialty Products has a consensus price target of $14.20, suggesting a potential upside of 52.20%. Given Platform Specialty Products’ higher possible upside, analysts plainly believe Platform Specialty Products is more favorable than Cabot.
Cabot beats Platform Specialty Products on 11 of the 17 factors compared between the two stocks.
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.
About Platform Specialty Products
Platform Specialty Products Corporation produces and sells specialty chemical products in the Americas, the Asia-Pacific, and Europe. It operates through two segments, Performance Solutions and Agricultural Solutions. The Performance Solutions segment offers plating products that are used to plate holes; electroless nickel products, which are applied to various metal and plastic surfaces; electronic assembly materials for use in the electronic market and residential boiler systems; final finishes that are used on printed circuit boards; circuit formation products for surface preparation; oxides, which are used in the fabrication of multilayer circuit boards; semiconductor materials and packaging products; and pre-treatment and cleaning solutions. This segment also provides functional conversion coatings that are applied to metals to enhance corrosion resistance and paint adhesion; hard-coated films, which are used for the membrane switch in the touch screen markets; production and drilling fluids used in subsea control systems; solid sheet printing elements for use in flexographic printing and platemaking processes; liquid products to produce printing plates; and printing equipment. The Agricultural Solutions segment offers fungicides and biofungicides to prevent the spread of fungi and other diseases in crops; herbicides to control unwanted plants; insecticides, bioinsecticides, and acaricides; biostimulants and nutrition products; and seed treatment products, which are applied to seed before planting, as well as animal health products, such as honey bee protective miticides and veterinary vaccines. The company was formerly known as Platform Acquisition Holdings Limited and changed its name to Platform Specialty Products Corporation in October 2013. Platform Specialty Products Corporation was founded in 1922 and is headquartered in West Palm Beach, Florida.
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