Cabot (NYSE:CBT) vs. Avient (NYSE:AVNT) Financial Analysis

Avient (NYSE:AVNT) and Cabot (NYSE:CBT) are both mid-cap basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, institutional ownership, risk, earnings, analyst recommendations, dividends and profitability.

Analyst Ratings

This is a breakdown of recent ratings for Avient and Cabot, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Avient	1	4	4	1	2.50
Cabot	2	2	1	0	1.80

Avient currently has a consensus price target of $42.50, indicating a potential upside of 41.88%. Cabot has a consensus price target of $63.67, indicating a potential downside of 1.27%. Given Avient’s stronger consensus rating and higher probable upside, analysts plainly believe Avient is more favorable than Cabot.

Dividends

Avient pays an annual dividend of $1.08 per share and has a dividend yield of 3.6%. Cabot pays an annual dividend of $1.80 per share and has a dividend yield of 2.8%. Avient pays out 87.8% 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 30.0% of its earnings in the form of a dividend. Avient has raised its dividend for 1 consecutive years and Cabot has raised its dividend for 14 consecutive years.

Profitability

This table compares Avient and Cabot’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Avient	3.49%	10.75%	4.25%
Cabot	8.91%	24.55%	10.57%

Earnings & Valuation

This table compares Avient and Cabot”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Avient	$3.24 billion	0.85	$169.50 million	$1.23	24.35
Cabot	$3.71 billion	0.92	$331.00 million	$6.01	10.73

Cabot has higher revenue and earnings than Avient. Cabot is trading at a lower price-to-earnings ratio than Avient, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

95.5% of Avient shares are owned by institutional investors. Comparatively, 93.2% of Cabot shares are owned by institutional investors. 0.9% of Avient shares are owned by insiders. Comparatively, 3.0% of Cabot shares are owned by 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.

Volatility and Risk

Avient has a beta of 1.46, meaning that its share price is 46% more volatile than the S&P 500. Comparatively, Cabot has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500.

Summary

Cabot beats Avient on 10 of the 18 factors compared between the two stocks.

About Avient

Avient Corporation operates as a formulator of material solutions in the United States, Canada, Mexico, Europe, South America, and Asia. It operates in two segments, Color, Additives and Inks; and Specialty Engineered Materials. The Color, Additives and Inks segment offers custom color and additive concentrates in solid and liquid form for thermoplastics, dispersions for thermosets, and specialty inks; custom-formulated liquid system, such as polyester, vinyl, natural rubber and latex, polyurethane, and silicone; and proprietary inks. Its products are used in medical and pharmaceutical devices, food packaging, personal care and cosmetics, transportation, building products, wire and cable, recreational and athletic apparel, construction and filtration, outdoor furniture, healthcare, textiles and appliances, and industrial markets. The Specialty Engineered Materials segment provides specialty polymer formulations, services, and solutions for designers, assemblers, and processors of thermoplastic materials. It sells its products through direct sales personnel, distributors, and commissioned sales agents. The company was formerly known as PolyOne Corporation and changed its name to Avient Corporation in June 2020. Avient Corporation was founded in 1885 and is headquartered in Avon Lake, Ohio.

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.