Cabot (NYSE:CBT) vs. Akzo Nobel (OTCMKTS:AKZOY) Head-To-Head Review

Akzo Nobel (OTCMKTS:AKZOY) and Cabot (NYSE:CBT) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Akzo Nobel	0.53%	13.69%	4.35%
Cabot	8.91%	24.55%	10.57%

Dividends

Akzo Nobel pays an annual dividend of $0.25 per share and has a dividend yield of 1.1%. Cabot pays an annual dividend of $1.80 per share and has a dividend yield of 2.5%. Akzo Nobel pays out 250.0% 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. Cabot has raised its dividend for 14 consecutive years. Cabot is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

0.4% of Akzo Nobel shares are held by institutional investors. Comparatively, 93.2% of Cabot shares are held by institutional investors. 3.0% of Cabot shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Akzo Nobel and Cabot”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Akzo Nobel	$11.59 billion	1.03	$586.50 million	$0.10	232.50
Cabot	$3.71 billion	1.04	$331.00 million	$6.01	12.12

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

Volatility and Risk

Akzo Nobel has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500. Comparatively, Cabot has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Akzo Nobel and Cabot, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Akzo Nobel	0	3	2	1	2.67
Cabot	1	3	2	0	2.17

Cabot has a consensus price target of $72.25, indicating a potential downside of 0.80%. Given Cabot’s higher probable upside, analysts clearly believe Cabot is more favorable than Akzo Nobel.

Summary

Cabot beats Akzo Nobel on 11 of the 17 factors compared between the two stocks.

About Akzo Nobel

Akzo Nobel N.V. engages in the production and sale of paints and coatings worldwide. The company operates through two segments: Decorative Paints and Performance Coatings. It offers decorative paints, including paints, lacquers, and varnishes; and a range of mixing machines and color concepts for the building and renovation industry, as well as specialty coatings. The company also provides performance coatings that protect and enhance ships, cars, aircraft, yachts, architectural components, consumer goods, and oil and gas facilities. It offers its products under AkzoNobel, Alabastine, Alba, Andercol, Apla, Armstead Trade, Astral, Astral Batiment, AwlGrip, Brikol, Dulux, Bruguer, Cetabever, Cetol, Chemcraft, Colourland Paints, CONSOLAN, Coral, Cromadex, Cuprinol, Dynacoat, Flexa, Glitsa, Grip-Gard, Herbol, Hammerite, International, Interlux, Innenweis, Interpon, Inca, Luxol, Levis, Lesonal, Molto, Modern Classikk, Maxilite, Mauvilac, Mason CT, Marshall, Mactra, Nordsjo, Oxirite, Protecto, Procolor, Polyfilla, Polycell, Pinotex, Pintuco, Resicoat, Relest, Sparlack, Sadolin, Sikkens, Sea Hawk, Savana, Salcomix, Trimetal, Titanlux, Taubmans, U-tech, Vpowdertech, Vivechrom, Xylazel, Xyladecor, Wanda, and Zweihorn brands. The company serves to energy, packaging, infrastructure, and shipbuilding and maintenance industries, as well as general industries, such as agricultural and construction equipment, construction-related steel, metal fabrication, pipes, appliances, and transportation. The company was formerly known as Akzo NV and changed its name to Akzo Nobel N.V. in 1994. Akzo Nobel N.V. was founded in 1646 and is headquartered in Amsterdam, the Netherlands.

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.