LyondellBasell Industries (NYSE:LYB) and Cabot (NYSE:CBT) Financial Comparison

Cabot (NYSE:CBT) and LyondellBasell Industries (NYSE:LYB) are both basic materials companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, earnings, institutional ownership, analyst recommendations, risk and dividends.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Cabot and LyondellBasell Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cabot	1	4	1	0	2.00
LyondellBasell Industries	3	14	5	1	2.17

Cabot currently has a consensus target price of $73.75, indicating a potential downside of 0.46%. LyondellBasell Industries has a consensus target price of $65.61, indicating a potential downside of 18.59%. Given Cabot’s higher probable upside, equities research analysts plainly believe Cabot is more favorable than LyondellBasell Industries.

Risk & Volatility

Cabot has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500. Comparatively, LyondellBasell Industries has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500.

Earnings and Valuation

This table compares Cabot and LyondellBasell Industries”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cabot	$3.71 billion	1.04	$331.00 million	$5.71	12.98
LyondellBasell Industries	$30.15 billion	0.86	-$738.00 million	($2.33)	-34.59

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

Dividends

Cabot pays an annual dividend of $1.80 per share and has a dividend yield of 2.4%. LyondellBasell Industries pays an annual dividend of $2.76 per share and has a dividend yield of 3.4%. Cabot pays out 31.5% of its earnings in the form of a dividend. LyondellBasell Industries pays out -118.5% 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 and LyondellBasell Industries has raised its dividend for 14 consecutive years. LyondellBasell Industries is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Cabot and LyondellBasell Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cabot	8.62%	22.82%	10.07%
LyondellBasell Industries	-2.46%	4.93%	1.60%

Insider & Institutional Ownership

93.2% of Cabot shares are owned by institutional investors. Comparatively, 71.2% of LyondellBasell Industries shares are owned by institutional investors. 3.1% of Cabot shares are owned by company insiders. Comparatively, 0.1% of LyondellBasell Industries shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Cabot beats LyondellBasell Industries on 11 of the 17 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 LyondellBasell Industries

LyondellBasell Industries N.V. operates as a chemical company in the United States, Germany, Mexico, Italy, Poland, France, Japan, China, the Netherlands, and internationally. The company operates in six segments: Olefins and PolyolefinsAmericas; Olefins and PolyolefinsEurope, Asia, International; Intermediates and Derivatives; Advanced Polymer Solutions; Refining; and Technology. It produces and markets olefins and co-products, polyethylene, and polypropylene; and propylene oxide and derivatives; oxyfuels and related products; and intermediate chemicals, such as styrene monomer, acetyls, ethylene oxide, and ethylene glycol. In addition, the company produce and markets compounding and solutions including polypropylene compounds, engineered plastics, masterbatches, engineered composites, colors and powders, and advanced polymers including catalloy and polybutene-1; and refines heavy, high-sulfur crude oil and other crude oils, as well as refined products, including gasoline and distillates. Further, it develops and licenses chemical and polyolefin process technologies; manufactures and sells polyolefin catalysts; and serves food packaging, home furnishings, automotive components, and paints and coatings applications. LyondellBasell Industries N.V. was incorporated in 2009 and is headquartered in Houston, Texas.