In This Article:
Assessing the Sustainability of Cabot Corp's Dividends
Cabot Corp (NYSE:CBT) recently announced a dividend of $0.4 per share, payable on 2023-12-08, with the ex-dividend date set for 2023-11-22. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Cabot Corp's dividend performance and assess its sustainability.
What Does Cabot Corp Do?
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Cabot Corp manufactures and sells a variety of chemicals, materials, and chemical-based products. The company organizes itself into two segments based on the product type. The reinforcement materials segment, which generates more revenue than any other segment, sells rubber-grade carbon black products used in hoses and belts in automobiles. The performance chemicals segment sells ink-jet colorants and metal oxides used in the automotive and construction industries.
A Glimpse at Cabot Corp's Dividend History
Cabot Corp has maintained a consistent dividend payment record since 1984. Dividends are currently distributed on a quarterly basis. Cabot Corp has increased its dividend each year since 1994. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 29 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Cabot Corp's Dividend Yield and Growth
As of today, Cabot Corp currently has a 12-month trailing dividend yield of 1.96% and a 12-month forward dividend yield of 2.03%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Cabot Corp's annual dividend growth rate was 3.20%. Extended to a five-year horizon, this rate increased to 3.30% per year. And over the past decade, Cabot Corp's annual dividends per share growth rate stands at 7.20%.
Based on Cabot Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Cabot Corp stock as of today is approximately 2.31%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Cabot Corp's dividend payout ratio is 0.20.