Critical Review: Axalta Coating Systems (NYSE:AXTA) & Cabot (NYSE:CBT)

Cabot (NYSE:CBTGet Free Report) and Axalta Coating Systems (NYSE:AXTAGet Free Report) are both mid-cap materials companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, institutional ownership, profitability, earnings, dividends, risk and analyst recommendations.

Profitability

This table compares Cabot and Axalta Coating Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cabot 5.23% 20.29% 9.01%
Axalta Coating Systems 6.78% 22.35% 7.12%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Cabot and Axalta Coating Systems, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cabot 1 4 2 0 2.14
Axalta Coating Systems 0 11 4 0 2.27

Cabot currently has a consensus target price of $87.40, indicating a potential upside of 0.01%. Axalta Coating Systems has a consensus target price of $36.00, indicating a potential downside of 4.19%. Given Cabot’s higher probable upside, analysts clearly believe Cabot is more favorable than Axalta Coating Systems.

Earnings and Valuation

This table compares Cabot and Axalta Coating Systems”s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cabot $3.71 billion 1.21 $331.00 million $3.55 24.62
Axalta Coating Systems $5.12 billion 1.57 $378.00 million $1.62 23.20

Axalta Coating Systems has higher revenue and earnings than Cabot. Axalta Coating Systems is trading at a lower price-to-earnings ratio than Cabot, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

93.2% of Cabot shares are held by institutional investors. Comparatively, 98.3% of Axalta Coating Systems shares are held by institutional investors. 3.1% of Cabot shares are held by insiders. Comparatively, 0.5% of Axalta Coating Systems 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.

Volatility & Risk

Cabot has a beta of 0.84, indicating that its share price is 16% less volatile than the S&P 500. Comparatively, Axalta Coating Systems has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500.

Summary

Axalta Coating Systems beats Cabot on 9 of the 14 factors compared between the two stocks.

About Cabot

(Get Free Report)

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 Axalta Coating Systems

(Get Free Report)

Axalta Coating Systems Ltd., through its subsidiaries, manufactures, markets, and distributes high-performance coatings systems in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The company operates through two segments, Performance Coatings and Mobility Coatings. It also offers water and solvent-borne products and systems to repair damaged vehicles for independent body shops, multi-shop operators, and original equipment manufacturer (OEM) dealership body shops. In addition, the company provides functional and decorative liquid, and powder coatings used in various industrial applications, including building materials, cabinet, wood and luxury vinyl flooring and furniture market under the Voltatex, AquaEC, Durapon, Hydropon, UNRIVALED, Ceranamel, Industrial, Corlar Industrial, Tufcote, Imron Industrial, Alesta, Teodur, Nap-Gard, Abcite, and Plascoat brands for powder coatings. Further, it develops and supplies electrocoat, primer, the basecoat, and clearcoat products for OEMs of light and commercial vehicles; and coatings systems for various commercial applications, including HDT, MDT, bus, and rail under the Imron, Imron Elite, Centari, Rival, Corlar epoxy undercoats, and AquaEC brands. The company offers products under the Audurra, Abcite, Alesta, AquaEC, Centari, Ceranamel, Challenger, Chemophan, ColorNet, Cromax, Cromax Mosaic, Durapon 70, Duxone, Harmonized Coating Technologies, Imron ExcelPro, Lutophen, Nason, Spies Hecker, Standox, Stollaquid, Syntopal, Syrox, Raptor, U-POL, and Vermeera brand names. The company was formerly known as Axalta Coating Systems Bermuda Co., Ltd. and changed its name to Axalta Coating Systems Ltd. in August 2014. Axalta Coating Systems Ltd. was founded in 1866 and is headquartered in Glen Mills, Pennsylvania.

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