Cabot Corp. : CBT-US: Dividend Analysis : February 24th, 2017 (record date) : By the numbers : March 28, 2017

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 Yield
Dividend Quality Score

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.
Dividend Quality Score Vs Dividend Yield

Quadrant label definitions. Hover to know more

High Score;High Yield, High Score;Low Yield, Low Score;Low Yield, Low Score;High Yield

Dividend Coverage

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.

Dividend Coverage by Cash Flow (TTM)

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 History

Item 2012-09-30 2013-09-30 2014-09-30 2015-09-30 2016-09-30 Latest
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.

Company Profile

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.

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