Cabot (NYSE:CBT – Get Free Report) and ARQ (NASDAQ:ARQ – Get Free Report) are both materials companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, earnings, profitability, analyst recommendations and risk.
Profitability
This table compares Cabot and ARQ’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% |
| ARQ | -42.33% | -2.54% | -1.88% |
Analyst Ratings
This is a breakdown of recent ratings and target prices for Cabot and ARQ, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Cabot | 1 | 4 | 2 | 0 | 2.14 |
| ARQ | 1 | 1 | 1 | 0 | 2.00 |
Cabot presently has a consensus target price of $87.80, indicating a potential upside of 16.07%. ARQ has a consensus target price of $5.00, indicating a potential upside of 176.24%. Given ARQ’s higher possible upside, analysts plainly believe ARQ is more favorable than Cabot.
Earnings and Valuation
This table compares Cabot and ARQ”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Cabot | $3.63 billion | 1.07 | $331.00 million | $3.55 | 21.31 |
| ARQ | $120.34 million | 0.66 | -$52.61 million | ($1.26) | -1.44 |
Cabot has higher revenue and earnings than ARQ. ARQ is trading at a lower price-to-earnings ratio than Cabot, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
93.2% of Cabot shares are owned by institutional investors. Comparatively, 18.5% of ARQ shares are owned by institutional investors. 3.1% of Cabot shares are owned by company insiders. Comparatively, 20.1% of ARQ shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Risk and Volatility
Cabot has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500. Comparatively, ARQ has a beta of 2.08, meaning that its stock price is 108% more volatile than the S&P 500.
Summary
Cabot beats ARQ on 10 of the 13 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 ARQ
Arq, Inc. is a holding company. It engages in the provision of environmental and emission control equipment to the power generation industry. The company operates through the following Segments: Refined Coal and Advanced Purification Technologies. The Refined Coal segment includes the Tinuum Group, Tinuum Services, and GWN Manager. The Advanced Purification Technologies segment refers to the sale of Activated Carbon Injection and Dry Sorbent Injection equipment systems, chemical sales, consulting services, and other sales related to the reduction of emissions in the coal-fired electric generation process and the electric utility industry. The company was founded in 1996 and is headquartered in Greenwood Village, CO.
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