Comparing Solstice Advanced Mat (NASDAQ:SOLS) and Cabot (NYSE:CBT)

Cabot (NYSE:CBT) and Solstice Advanced Mat (NASDAQ:SOLS) are both mid-cap materials companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, risk, earnings, dividends and institutional ownership.

Dividends

Cabot pays an annual dividend of $1.89 per share and has a dividend yield of 2.5%. Solstice Advanced Mat pays an annual dividend of $0.30 per share and has a dividend yield of 0.5%. Cabot pays out 53.2% of its earnings in the form of a dividend. Solstice Advanced Mat pays out 16.9% 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 increased its dividend for 14 consecutive years. Cabot is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Cabot and Solstice Advanced Mat”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cabot	$3.71 billion	1.04	$331.00 million	$3.55	21.13
Solstice Advanced Mat	$3.89 billion	2.46	$237.00 million	$1.77	33.97

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

Insider and Institutional Ownership

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

Analyst Ratings

This is a breakdown of current recommendations for Cabot and Solstice Advanced Mat, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cabot	1	4	2	0	2.14
Solstice Advanced Mat	0	4	9	0	2.69

Cabot presently has a consensus price target of $87.80, indicating a potential upside of 17.05%. Solstice Advanced Mat has a consensus price target of $77.60, indicating a potential upside of 29.05%. Given Solstice Advanced Mat’s stronger consensus rating and higher probable upside, analysts clearly believe Solstice Advanced Mat is more favorable than Cabot.

Profitability

This table compares Cabot and Solstice Advanced Mat’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cabot	5.23%	20.29%	9.01%
Solstice Advanced Mat	5.13%	14.28%	4.82%

Summary

Cabot beats Solstice Advanced Mat on 9 of the 16 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 Solstice Advanced Mat

Solstice Advanced Materials is a leading global specialty materials company that advances science for smarter outcomes. Solstice offers high-performance solutions that enable critical industries and applications, including refrigerants, semiconductor manufacturing, data center cooling, nuclear power, protective fibers, healthcare packaging and more.