Johnson Matthey (OTCMKTS:JMPLY) vs. Cabot (NYSE:CBT) Critical Analysis

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

Profitability

This table compares Johnson Matthey and Cabot’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Johnson Matthey	N/A	N/A	N/A
Cabot	7.97%	21.33%	9.48%

Dividends

Johnson Matthey pays an annual dividend of $2.91 per share and has a dividend yield of 5.2%. Cabot pays an annual dividend of $1.89 per share and has a dividend yield of 2.1%. Cabot pays out 35.7% of its earnings in the form of a dividend. Cabot has increased its dividend for 14 consecutive years.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Johnson Matthey and Cabot, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Johnson Matthey	1	2	1	2	2.67
Cabot	1	4	2	0	2.14

Cabot has a consensus price target of $83.80, indicating a potential downside of 8.35%. Given Cabot’s higher probable upside, analysts clearly believe Cabot is more favorable than Johnson Matthey.

Volatility and Risk

Johnson Matthey has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500. Comparatively, Cabot has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500.

Valuation & Earnings

This table compares Johnson Matthey and Cabot”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Johnson Matthey	$16.85 billion	0.28	-$128.69 million	N/A	N/A
Cabot	$3.71 billion	1.27	$331.00 million	$5.29	17.28

Cabot has lower revenue, but higher earnings than Johnson Matthey.

Insider & Institutional Ownership

93.2% of Cabot shares are held by institutional investors. 3.1% of Cabot shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Cabot beats Johnson Matthey on 10 of the 16 factors compared between the two stocks.

About Johnson Matthey

Johnson Matthey is a global leader in science that enables a cleaner and healthier world. With over 200 years of sustained commitment to innovation and technological breakthroughs, they improve the function, performance and safety of their customers’ products. Their science has a global impact in areas such as low emission transport, pharmaceuticals, chemical processing and making the most efficient use of the planet’s natural resources. Today more than 13,000 Johnson Matthey professionals collaborate with their network of customers and partners to make a real difference to the world around us.

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.