WD-40 (NASDAQ: WDFC) and Cabot (NYSE:CBT) are both mid-cap consumer staples companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, risk, valuation, earnings, profitability and institutional ownership.
Volatility and Risk
WD-40 has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500. Comparatively, Cabot has a beta of 1.38, indicating that its stock price is 38% more volatile than the S&P 500.
Earnings & Valuation
This table compares WD-40 and Cabot’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|WD-40||$380.51 million||5.51||$52.93 million||$3.72||40.48|
|Cabot||$2.72 billion||1.45||$241.00 million||$3.43||18.62|
Cabot has higher revenue and earnings than WD-40. Cabot is trading at a lower price-to-earnings ratio than WD-40, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
85.2% of WD-40 shares are held by institutional investors. Comparatively, 85.7% of Cabot shares are held by institutional investors. 3.9% of WD-40 shares are held by insiders. Comparatively, 2.5% of Cabot shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
This is a breakdown of current ratings for WD-40 and Cabot, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
WD-40 presently has a consensus target price of $125.67, indicating a potential downside of 16.56%. Cabot has a consensus target price of $72.50, indicating a potential upside of 13.55%. Given Cabot’s stronger consensus rating and higher possible upside, analysts plainly believe Cabot is more favorable than WD-40.
WD-40 pays an annual dividend of $2.16 per share and has a dividend yield of 1.4%. Cabot pays an annual dividend of $1.32 per share and has a dividend yield of 2.1%. WD-40 pays out 58.1% of its earnings in the form of a dividend. Cabot pays out 38.5% 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. Cabot has raised its dividend for 6 consecutive years. Cabot is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares WD-40 and Cabot’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Cabot beats WD-40 on 10 of the 17 factors compared between the two stocks.
WD-40 Company engages in the development and sale of maintenance products, and homecare and cleaning products. It offers multi-purpose maintenance products, including aerosol sprays, non-aerosol trigger sprays, and in liquid-bulk form products under the WD-40 Multi-Use brand name for various consumer uses; specialty maintenance products, such as penetrants, degreasers, corrosion inhibitors, greases, lubricants, and rust removers under the WD-40 Specialist brand name; and bicycle maintenance products under the WD-40 Bike brand name comprising wet and dry chain lubricants, chain cleaners and degreasers, and foaming wash products that are designed for avid and recreational cyclists, bike enthusiasts, and mechanics. The company also provides multi-purpose and specialty drip oils, and spray lubricant products, as well as other specialty maintenance products under the 3-IN-ONE brand name; and professional spray maintenance products and lubricants for the bike market under the GT85 brand name. In addition, it offers automatic toilet bowl cleaners under the 2000 Flushes brand name; aerosol carpet stain removers, and a liquid trigger carpet stain and odor eliminators under the Spot Shot brand name; room and rug deodorizers under the Carpet Fresh brand name; carpet and household cleaners, and rug and room deodorizers under the 1001 brand name; heavy-duty hand cleaner products under the Lava brand name; and liquid mildew stain removers and automatic toilet bowl cleaners under the X-14 brand name. It offers products primarily through mass retail and home center stores, warehouse club stores, grocery stores, hardware stores, automotive parts outlets, sport retailers, independent bike dealers, online retailers, and industrial distributors and suppliers in North, Central, and South America, as well as in Asia, Australia, Europe, the Middle East, and Africa. The company was founded in 1953 and is headquartered in San Diego, California.
Cabot Corporation operates as a specialty chemicals and performance materials company. The company offers carbon black, a form of elemental carbon used to enhance the physical properties of the systems and applications in which it is incorporated; and rubber blacks for use as a rubber reinforcing agent and performance additive in tires, hoses, belts, extruded profiles, and molded goods. It also provides compounds of carbon black and rubber primarily for tire applications; and cesium formate, a drilling and completion fluid for use in high pressure and high temperature oil and gas well construction. In addition, the company offers specialty grades of carbon black used in inks, coatings, plastics, adhesives, toners, batteries, and displays applications; masterbatch and conductive compound products for use in automotive, industrial, packaging, consumer products, and electronics industries; inkjet colorants used in the inkjet printing applications; and fumed silica, fumed alumina, and dispersions for automotive, construction, microelectronics, batteries, and consumer products industries, as well as aerogel, a hydrophobic, silica-based particle for use in various thermal insulation and specialty chemical applications. Further, it provides activated carbon products used for the purification of water, air, food and beverages, pharmaceuticals, and other liquids and gases; as a chemical carrier; and as a colorant or a decolorizing agent. The company sells its products primarily 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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