Cabot Corp (NYSE: CBT)

Sector: Basic Materials Industry: Specialty Chemicals CIK: 0000016040
Market Cap 4.04 Bn
P/B 2.56
P/E 12.99
P/S 1.12
ROIC (Qtr) 14.68
Div Yield % 2.38
Rev 1y % (Qtr) -11.10
Total Debt (Qtr) 1.13 Bn
Debt/Equity (Qtr) 0.71
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About

Cabot Corporation, a global specialty chemicals and performance materials company, operates under the ticker symbol CBT. The company's main business activities involve the design, manufacture, and sale of reinforcing and specialty carbons, specialty compounds, conductive additives, carbon nanotubes, fumed metal oxides, inkjet colorants, and aerogel. These products are used in a wide range of applications, including tires, industrial products, automotive, construction, infrastructure, inkjet printing, electronics, and consumer products. Cabot's...

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Investment thesis

Bull case

  • Strong operating cash flow of 667M provides robust 0.59x coverage of total debt 1.13B, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 3.57B provides 3.17x coverage of total debt 1.13B, indicating robust asset backing and low credit risk.
  • Operating cash flow of 667M provides exceptional 15.51x coverage of minority interest expenses 43M, showing strong core operations.
  • Operating cash flow of 667M provides strong 35.11x coverage of stock compensation 19M, indicating sustainable incentive practices.
  • Robust free cash flow of 401M exceeds capital expenditure of 266M by 1.51x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 667M barely covers its investment activities of (263M), with a coverage ratio of -2.54, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (263M) provide weak support for R&D spending of 58M, which is -4.53x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 667M provides thin coverage of dividend payments of (96M) with a -6.95 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 401M represents just -4.66x of debt issuance (86M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Retained earnings of 1.84B provide limited buffer against comprehensive income items of (310M), which is -5.92x, indicating elevated exposure to market risks.

Segments Breakdown of Revenue (2025)

Consolidation Items Breakdown of Revenue (2025)

Peer comparison

Companies in the Specialty Chemicals
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 LIN Linde Plc 259.51 Bn 110.86 9.26 25.93 Bn
2 SHW Sherwin Williams Co 101.80 Bn 102.98 9.01 13.58 Bn
3 ECL Ecolab Inc. 86.78 Bn 76.91 6.25 8.67 Bn
4 APD Air Products & Chemicals, Inc. 58.65 Bn 49.06 6.08 18.14 Bn
5 PPG Ppg Industries Inc 31.75 Bn 25.73 2.06 7.91 Bn
6 DD DuPont de Nemours, Inc. 21.19 Bn -27.20 3.09 3.19 Bn
7 IFF International Flavors & Fragrances Inc 21.16 Bn -8.98 1.87 6.60 Bn
8 ALB Albemarle Corp 19.87 Bn -29.33 3.86 3.19 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.31 1.62
EV to Cash from Ops. EV/CFO 7.36 10.83
EV to Debt EV to Debt 4.36 16.61
EV to EBIT EV/EBIT 8.48 -61.80
EV to EBITDA EV/EBITDA 6.52 -9.02
EV to Free Cash Flow [EV/FCF] EV/FCF 12.25 6.67
EV to Market Cap EV to Market Cap 1.22 5.10
EV to Revenue EV/Rev 1.36 72.68
Price to Book Value [P/B] P/B 2.56 5.37
Price to Earnings [P/E] P/E 12.99 14.34
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 3.24 -5.46
Dividend Payout Ratio % Div Payout % (Qtr) 30.90 -74.36
Dividend per Basic Share Div per Share (Qtr) 1.78 1.27
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 23.39 9.98
Interest Coverage Int. cover (Qtr) 7.62 -9.95
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -0.76 -1,110.27
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 25.68 83.68
Dividend Growth (1y) % Div 1y % (Qtr) 5.33 -3.28
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -25.91 -80.22
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -3.46 48.27
EBIT Growth (1y) % EBIT 1y % (Qtr) -6.31 11.23
EBT Growth (1y) % EBT 1y % (Qtr) -7.02 -62.96
EPS Growth (1y) % EPS 1y % (Qtr) -24.21 -125.48
FCF Growth (1y) % FCF 1y % (Qtr) -10.29 4.34
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -6.24 193.82
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.96 0.70
Cash Payout Ratio Cash Payout (Qtr) 0.10 0.40
Cash Ratio Cash Ratio (Qtr) 0.26 1.24
Current Ratio Curr Ratio (Qtr) 1.67 3.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.71 0.92
Interest Cover Ratio Int Coverage (Qtr) 7.62 -9.95
Times Interest Earned Times Interest Earned (Qtr) 7.62 -9.95
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 20.40 -320.64
EBIT Margin % EBIT Margin % (Qtr) 16.05 -360.99
EBT Margin % EBT Margin % (Qtr) 13.95 -366.51
Gross Margin % Gross Margin % (Qtr) 25.40 29.06
Net Profit Margin % Net Margin % (Qtr) 8.60 -367.54