Our analysis is based on comparing Cabot Corp. with the following peers – W. R. Grace & Co., Koppers Holdings Inc., Dow Chemical Company, Exxon Mobil Corporation, Corning Inc and Aspen Aerogels Inc (GRA-US, KOP-US, DOW-US, XOM-US, GLW-US and ASPN-US).
Dividend Quality Overview
- Over the last twelve months (prior to December 31, 2016), CBT-US paid a medium quality dividend, which represents a yield of 1.92% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 4 were high quality and 1 was low quality.
- The ending cash balance, with a dividend coverage of 2.70x, provides a moderate cushion in case of a significant reduction of cash flows in the future.
Quadrant label definitions. Hover to know more
Over the last twelve months (prior to December 31, 2016), CBT-US paid a medium quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 5.87x), investing cash flow (coverage of -1.56x), issuance cash flow (coverage of -1.43x) and twelve-month prior cash (coverage of 1.20x), for a total dividend coverage of 3.70x.
CBT-US‘s issuance cash flow includes outflows from net debt repayment (coverage of -4.31x) and net share buybacks (coverage of -0.50x). Thus, the total coverage including share buybacks is 4.20x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.
These coverage ratio factors imply that the firm’s net cash inflow from issuance was required (in addition to operating and investment cash) to pay the dividend, which suggests a medium dividend quality.
|Dividend Yield (%)||2.12||1.87||1.65||2.84||1.99||2.06|
|Dividend Payout (%)||25.15||34.4||28.33||-16.6||44.44||33.89|
A complete list of metrics and analysis is available on the company page.
Cabot Corp. manufactures and supplies organic chemicals. It operates through the following segments: Reinforcement Materials, Performance Materials, Purification Solutions, and Specialty Fluids. The Reinforcement Materials segment produces rubber blacks that are used on tires, hoses, belts, and molded goods. The Performance Materials segment sells specialty additives that enable performance in: plastics, wire and cable, toners, coatings, adhesives and sealants, electronics, batteries, inks, inkjet printing, composites, silicones, building construction materials, and industrial insulation. The Purification Solutions segment manufactures activated carbon for purification of: air and water, food and beverages, pharmaceuticals, and catalysts. The Specialty Fluids segment formulates advanced cesium products for use in: oil and gas well drilling and completion fluids; catalysts; titanium dioxide; glass; and automotive brazing fluids. The company was founded by Godfrey Lowell Cabot in 1882 and is headquartered in Boston, MA.
The information presented in this report has been obtained from sources deemed to be reliable, but AnalytixInsight does not make any representation about the accuracy, completeness, or timeliness of this information. This report was produced by AnalytixInsight for informational purposes only and nothing contained herein should be construed as an offer to buy or sell or as a solicitation of an offer to buy or sell any security or derivative instrument. This report is current only as of the date that it was published and the opinions, estimates, ratings and other information may change without notice or publication. Past performance is no guarantee of future results. Prior to making an investment or other financial decision, please consult with your financial, legal and tax advisors. AnalytixInsight shall not be liable for any party’s use of this report. AnalytixInsight is not a broker-dealer and does not buy, sell, maintain a position, or make a market in any security referred to herein. One of the principal tenets for us at AnalytixInsight is that the best person to handle your finances is you. By your use of our services or by reading any our reports, you’re agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that AnalytixInsight, its directors, its employees, and its agents will not be liable for any investment decision made or action taken by you and others based on news, information, opinion, or any other material generated by us and/or published through our services. For a complete copy of our disclaimer, please visit our website www.analytixinsight.com.