Cabot Corp (CBT) stock analysis

P/E above its 5-year median

Cabot's P/E of 13.3 is above its own 5-year median of 12.9.

P/E below the industry

Cabot's P/E of 13.3 is below the Chemicals and Allied Products median of 25.2.

EV/EBITDA below its 5-year median

Cabot's EV/EBITDA of 5.6 is below its 5-year median of 7.7.

P/B above the industry

Cabot's price-to-book of 2.32 is above the Chemicals and Allied Products median of 2.24.

Trading below fair value

The share price of $72.23 is below our fair value estimate of $137.19.

Margin of safety over 20%

The price is 47.4% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -4.9% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 18.5% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing faster than the industry

Revenue grew 16.6% over the last twelve months; the Chemicals and Allied Products median is 11.0%.

Guidance lowered

Cabot lowered its full year Adjusted EPS outlook on Feb 3, 2026.

Gross margin slipping

Gross margin was 23.5% over the last twelve months, against 24.9% a year earlier.

Return on equity over 15%

Return on equity was 19.2% over the last twelve months and averaged 29.0% over five years.

Return on capital over 10%

Return on invested capital was 15.1%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Cabot's return on equity of 19.2% is above the Chemicals and Allied Products median of 7.4%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin below its 5-year average

Net margin was 6.4% over the last twelve months, against a 5-year average of 8.4%.

Net margin above the industry

Cabot's net margin of 6.4% is above the Chemicals and Allied Products median of 5.6%.

High debt

Debt is 79.3% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 161% five years ago to 79.3%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 58.6% of total debt.

Interest well covered

Operating income covers interest expense 7.1 times.

Short-term assets cover short-term debts

Current assets are 1.47 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.49; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Cabot paid dividends worth 2.6% of the share price over the last twelve months.

Yield below Treasuries

The 2.6% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Cabot yields 2.6%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 41.6% of net income.

Covered by free cash flow

Dividends take 25.8% of free cash flow.