Head-To-Head Survey: Cabot (NYSE:CBT) and Sumitomo Chemcl (OTCMKTS:SOMMY)

Cabot (NYSE:CBT) and Sumitomo Chemcl (OTCMKTS:SOMMY) are both mid-cap basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, valuation, risk, analyst recommendations, institutional ownership, earnings and profitability.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Cabot and Sumitomo Chemcl, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cabot	1	4	1	0	2.00
Sumitomo Chemcl	0	1	0	0	2.00

Cabot presently has a consensus price target of $73.75, indicating a potential downside of 4.62%. Given Cabot’s higher probable upside, research analysts clearly believe Cabot is more favorable than Sumitomo Chemcl.

Earnings and Valuation

This table compares Cabot and Sumitomo Chemcl”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cabot	$3.71 billion	1.09	$331.00 million	$5.71	13.54
Sumitomo Chemcl	$17.12 billion	0.31	$254.70 million	$1.96	8.13

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

Volatility & Risk

Cabot has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500. Comparatively, Sumitomo Chemcl has a beta of 0.28, indicating that its stock price is 72% less volatile than the S&P 500.

Insider and Institutional Ownership

93.2% of Cabot shares are held by institutional investors. 3.1% 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 is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Cabot	8.62%	22.82%	10.07%
Sumitomo Chemcl	4.01%	8.40%	2.82%

Dividends

Cabot pays an annual dividend of $1.80 per share and has a dividend yield of 2.3%. Sumitomo Chemcl pays an annual dividend of $0.26 per share and has a dividend yield of 1.6%. Cabot pays out 31.5% of its earnings in the form of a dividend. Sumitomo Chemcl pays out 13.3% 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 14 consecutive years. Cabot is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Cabot beats Sumitomo Chemcl on 14 of the 16 factors compared between the two stocks.

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.

About Sumitomo Chemcl

Sumitomo Chemical Company, Limited engages in Chemicals & Plastics, energy and functional materials, IT-related chemicals, health and crop sciences, pharmaceuticals, and other businesses worldwide. Its Essential Chemicals & Plastics segment offers synthetic resins, such as polyethylene, polypropylene, and polymethyl methacrylate resins; raw materials for synthetic fibers; and various industrial chemicals. The company's Energy & Functional Materials segment provides alumina and aluminum products used for energy products; resorcinol for tires, wood adhesives, flame retardants, and ultraviolet ray absorbants; polymer additives and rubber chemicals; synthetic rubber for tires, shoes, construction materials, and other applications; and engineering plastics and lithium-ion secondary battery materials for use in electronic components and next-generation vehicles. Its IT-Related Chemicals segment provides polarizing films, touch screen sensor panels, and color resists and polymer OLED for LC and OLED displays; photoresists and high-purity chemicals for the semiconductor manufacturing process; and compound semiconductor materials for antenna switches and other components of communication terminal equipment. The company's Health & Crop Sciences segment offers crop protection chemicals, fertilizers, feed additives, and household insecticides; active pharmaceutical ingredients and intermediates; and products to control infectious diseases. Its Pharmaceuticals segment provides prescription and diagnostic pharmaceuticals. The company's Others segment supplies electric power and steam; designs, constructs, and supervises chemical plants; provides transportation and warehousing services; and conducts physical property and environmental analysis. Sumitomo Chemical Company, Limited was founded in 1913 and is headquartered in Tokyo, Japan.