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Cabot Corporation (CBT)

Company Dividend Discount ModelIndustry: Chemicals - SpecialtySector: Basic Materials

Valuation Snapshot

Stable Growth$91.06 - $167.62$122.61
Multi-Stage$90.38 - $98.85$94.54
Blended Fair Value$108.57
Current Price$76.05
Upside42.77%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS3.71%5.54%1.771.721.631.551.481.481.481.481.421.20
YoY Growth--3.23%5.68%4.76%5.00%0.00%0.00%0.00%3.90%18.46%16.07%
Dividend Yield--2.33%1.88%1.95%2.32%2.63%3.29%3.11%3.44%2.31%2.38%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)331.00
(-) Cash Dividends Paid (M)96.00
(=) Cash Retained (M)235.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)66.2041.3824.83
Cash Retained (M)235.00235.00235.00
(-) Cash Required (M)-66.20-41.38-24.83
(=) Excess Retained (M)168.80193.63210.18
(/) Shares Outstanding (M)54.1554.1554.15
(=) Excess Retained per Share3.123.583.88
LTM Dividend per Share1.771.771.77
(+) Excess Retained per Share3.123.583.88
(=) Adjusted Dividend4.895.355.65
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate3.54%4.54%5.54%
Fair Value$91.06$122.61$167.62
Upside / Downside19.74%61.23%120.40%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)331.00346.02361.72378.14395.30413.23425.63
Payout Ratio29.00%41.20%53.40%65.60%77.80%90.00%92.50%
Projected Dividends (M)96.00142.57193.17248.06307.54371.91393.71

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate3.54%4.54%5.54%
Year 1 PV (M)129.43130.68131.93
Year 2 PV (M)159.20162.29165.41
Year 3 PV (M)185.60191.03196.57
Year 4 PV (M)208.90217.09225.52
Year 5 PV (M)229.34240.63252.36
PV of Terminal Value (M)3,981.364,177.384,381.04
Equity Value (M)4,893.845,119.115,352.83
Shares Outstanding (M)54.1554.1554.15
Fair Value$90.38$94.54$98.85
Upside / Downside18.84%24.31%29.98%

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