Cabot (NYSE: CBT) and Terravia (OTCMKTS:TVIAQ) are both basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, dividends, valuation and analyst recommendations.

Analyst Recommendations

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This is a summary of recent recommendations for Cabot and Terravia, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cabot 0 2 5 0 2.71
Terravia 0 1 0 0 2.00

Cabot currently has a consensus price target of $69.80, indicating a potential upside of 3.09%. Terravia has a consensus price target of $1.50, indicating a potential upside of 49,900.00%. Given Terravia’s higher probable upside, analysts plainly believe Terravia is more favorable than Cabot.

Valuation & Earnings

This table compares Cabot and Terravia’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cabot $2.72 billion 1.54 $241.00 million $3.81 17.77
Terravia $18.48 million 0.02 -$101.55 million ($1.14) 0.00

Cabot has higher revenue and earnings than Terravia. Terravia 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

84.0% of Cabot shares are owned by institutional investors. Comparatively, 0.2% of Terravia shares are owned by institutional investors. 2.5% of Cabot shares are owned by company insiders. Comparatively, 10.1% of Terravia 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.

Dividends

Cabot pays an annual dividend of $1.26 per share and has a dividend yield of 1.9%. Terravia does not pay a dividend. Cabot pays out 33.1% of its earnings in the form of a dividend. Terravia has increased its dividend for 6 consecutive years.

Profitability

This table compares Cabot and Terravia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cabot 8.87% 15.11% 6.95%
Terravia N/A N/A N/A

Volatility and Risk

Cabot has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500. Comparatively, Terravia has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500.

Summary

Cabot beats Terravia on 12 of the 17 factors compared between the two stocks.

Cabot Company Profile

Cabot Corporation is a global specialty chemicals and performance materials company. The Company operates through four business segments: reinforcement materials, performance chemicals, purification solutions and specialty fluids. Reinforcement materials’ rubber grade carbon blacks are used to enhance the physical properties of the systems and applications in which they are incorporated. Its rubber blacks products are used in tires and industrial products. Performance Chemicals consists of two businesses: specialty carbons and formulations business, and metal oxides business. Purification Solutions’ activated carbon products are used for the purification of water, air and pharmaceuticals, among others, as either a colorant or a decolorizing agent in the production of food and beverage applications. Its specialty fluids segment produces and markets cesium formate as a drilling and completion fluid for use in high pressure and high temperature oil and gas well construction.

Terravia Company Profile

Solazyme, Inc. creates renewable oils and bioproducts. The Company’s technology uses microalgae in an industrial fermentation process to transform a range of plant-based sugars into triglyceride oils and other bioproducts. The Company offers Algenist, a skin and personal care product available at Sephora S.A. and its affiliates, QVC, Inc., SpaceNK Limited, select Nordstrom stores and ULTA Beauty. It offers intermediates/ingredients, such as Tailored oils, powdered oils, and other closely related products targeted at customers in the industrial products, food products and personal care products markets. The Company’s commercial focus is to sell oils, encapsulated oils and whole algal powdered products to companies that use them as intermediates and ingredients.

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