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Here's Why You Should Add Cabot (CBT) Stock to Your Portfolio
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Cabot Corporation’s (CBT - Free Report) stock looks promising at the moment. We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s delve deeper into the factors that make this chemical company an attractive investment option.
What’s Working in Favor of CBT?
An Outperformer: Cabot, a Zacks Rank #2 (Buy) stock, has outperformed the industry it belongs to over the last six months, partly driven by its better-than-expected earnings performance in the last reported quarter. The company’s shares have gained around 12.4% over this period, compared with roughly 4.6% gain recorded by the industry.
Forecast-topping Q1 and Upbeat Outlook: Cabot topped earnings and revenue estimates in the first quarter of fiscal 2018 (ended Dec 31, 2017). Its adjusted earnings for the quarter were 93 cents per share, up from 85 cents a year ago, also surpassing the Zacks Consensus Estimate of 78 cents.
Net sales also climbed around 18% year over year to $720 million in the quarter on gains across most segments and outpaced the Zacks Consensus Estimate of $644 million.
Cabot expects its Reinforcement Materials segment to benefit, in the fiscal second quarter, from customer agreements along with a firm spot market in Europe and Asia. Also, the Performance Chemicals segment is expected to witness an improvement on a sequential basis owing to higher seasonal volumes and the favorable impact from price increases. Continued momentum in the specialty applications is also expected to benefit the Purification Solutions segment.
Estimates Northbound: Annual earnings estimates for Cabot have moved north over the past two months, reflecting analysts’ confidence on the stock. Over this period, the Zacks Consensus Estimate for fiscal 2018 has moved up 7.1% to $4.06 per share. The Zacks Consensus Estimate for fiscal 2019 has also increased 7.6% to $4.53 per share.
Superior Return on Equity (ROE): Cabot’s ROE of 15%, as compared with the industry average of 9.4%, manifests the company’s efficiency in utilizing shareholder’s funds.
Healthy Growth Prospects: The Zacks Consensus Estimate for earnings for fiscal 2018 for Cabot is currently pegged at $4.06, reflecting an expected year-over-year growth of 18.4%. Moreover, earnings are expected to register a 11.6% growth in fiscal 2019. The company also has an expected long-term earnings per share growth of 10%.
Other top-ranked companies in the chemicals space include Kronos Worldwide, Inc. (KRO - Free Report) , LyondellBasell Industries N.V. (LYB - Free Report) and Eastman Chemical Company (EMN - Free Report) .
Kronos sports a Zacks Rank #1 (Strong Buy) and has an expected long-term earnings growth rate of 5%. Its shares have rallied roughly 50% over a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
LyondellBasell carries a Zacks Rank #1 and has an expected long-term earnings growth rate of 9%. Its shares have gained around 19% over a year.
Eastman Chemical has an expected long-term earnings growth rate of 8.9% and carries a Zacks Rank #2. Its shares have gained around 35% over a year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Here's Why You Should Add Cabot (CBT) Stock to Your Portfolio
Cabot Corporation’s (CBT - Free Report) stock looks promising at the moment. We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s delve deeper into the factors that make this chemical company an attractive investment option.
What’s Working in Favor of CBT?
An Outperformer: Cabot, a Zacks Rank #2 (Buy) stock, has outperformed the industry it belongs to over the last six months, partly driven by its better-than-expected earnings performance in the last reported quarter. The company’s shares have gained around 12.4% over this period, compared with roughly 4.6% gain recorded by the industry.
Forecast-topping Q1 and Upbeat Outlook: Cabot topped earnings and revenue estimates in the first quarter of fiscal 2018 (ended Dec 31, 2017). Its adjusted earnings for the quarter were 93 cents per share, up from 85 cents a year ago, also surpassing the Zacks Consensus Estimate of 78 cents.
Net sales also climbed around 18% year over year to $720 million in the quarter on gains across most segments and outpaced the Zacks Consensus Estimate of $644 million.
Cabot expects its Reinforcement Materials segment to benefit, in the fiscal second quarter, from customer agreements along with a firm spot market in Europe and Asia. Also, the Performance Chemicals segment is expected to witness an improvement on a sequential basis owing to higher seasonal volumes and the favorable impact from price increases. Continued momentum in the specialty applications is also expected to benefit the Purification Solutions segment.
Estimates Northbound: Annual earnings estimates for Cabot have moved north over the past two months, reflecting analysts’ confidence on the stock. Over this period, the Zacks Consensus Estimate for fiscal 2018 has moved up 7.1% to $4.06 per share. The Zacks Consensus Estimate for fiscal 2019 has also increased 7.6% to $4.53 per share.
Superior Return on Equity (ROE): Cabot’s ROE of 15%, as compared with the industry average of 9.4%, manifests the company’s efficiency in utilizing shareholder’s funds.
Healthy Growth Prospects: The Zacks Consensus Estimate for earnings for fiscal 2018 for Cabot is currently pegged at $4.06, reflecting an expected year-over-year growth of 18.4%. Moreover, earnings are expected to register a 11.6% growth in fiscal 2019. The company also has an expected long-term earnings per share growth of 10%.
Cabot Corporation Price and Consensus
Cabot Corporation Price and Consensus | Cabot Corporation Quote
Other Stocks to Consider
Other top-ranked companies in the chemicals space include Kronos Worldwide, Inc. (KRO - Free Report) , LyondellBasell Industries N.V. (LYB - Free Report) and Eastman Chemical Company (EMN - Free Report) .
Kronos sports a Zacks Rank #1 (Strong Buy) and has an expected long-term earnings growth rate of 5%. Its shares have rallied roughly 50% over a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
LyondellBasell carries a Zacks Rank #1 and has an expected long-term earnings growth rate of 9%. Its shares have gained around 19% over a year.
Eastman Chemical has an expected long-term earnings growth rate of 8.9% and carries a Zacks Rank #2. Its shares have gained around 35% over a year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>