Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Cabot Corporation (NYSE:CBT) due to its excellent fundamentals in more than one area. CBT is a financially-healthy company with a an impressive history of dividend payments and an optimistic growth outlook. Below, I’ve touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Cabot here.
Reasonable growth potential with adequate balance sheet and pays a dividend
CBT’s cash-generating ability is outstanding, with analysts expecting its operating cash flows to flourish by 59% in the upcoming year. This is expected to flow down into an impressive return on equity of 21% over the next couple of years. CBT’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This suggests prudent control over cash and cost by management, which is a crucial insight into the health of the company. CBT’s has produced operating cash levels of 0.29x total debt over the past year, which implies that CBT’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
CBT dishes out decent dividend payments over time, higher than the low-risk savings rate, which is what investors want in order to compensate them for the risk of holding a stock.
For Cabot, there are three essential factors you should further research:
- Historical Performance: What has CBT’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Valuation: What is CBT worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether CBT is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of CBT? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.