Financial Review: ARQ (NASDAQ:ARQ) vs. Cabot (NYSE:CBT)

ARQ (NASDAQ:ARQ) and Cabot (NYSE:CBT) are both business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, analyst recommendations and dividends.

Insider and Institutional Ownership

18.5% of ARQ shares are owned by institutional investors. Comparatively, 93.2% of Cabot shares are owned by institutional investors. 22.2% of ARQ shares are owned by company insiders. Comparatively, 3.1% of Cabot shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for ARQ and Cabot, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARQ	0	0	0	0	N/A
Cabot	0	3	2	0	2.40

Cabot has a consensus target price of $90.17, suggesting a potential downside of 4.19%. Given Cabot’s higher probable upside, analysts clearly believe Cabot is more favorable than ARQ.

Volatility and Risk

ARQ has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500. Comparatively, Cabot has a beta of 1.27, meaning that its share price is 27% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ARQ	-12.35%	-8.35%	-6.16%
Cabot	11.24%	25.52%	9.66%

Earnings and Valuation

This table compares ARQ and Cabot’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ARQ	$99.18 million	2.69	-$12.25 million	($0.50)	-15.94
Cabot	$3.93 billion	1.33	$445.00 million	$7.70	12.22

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

Summary

Cabot beats ARQ on 10 of the 13 factors compared between the two stocks.

About ARQ

Arq, Inc. produces activated carbon products in North America. The company's products include granular activated carbon, powdered and granular activated carbon, and colloidal carbon products; Arq Powder Wetcake, a fine and low-ash coal waste-derived particle; and additives for air emissions control. Its products are used in various applications, including water treatment, ground water remediation, soil sediments, air emissions, and asphalt additives. The company was formerly known as Advanced Emissions Solutions, Inc. and changed its name to Arq, Inc. in February 2024. Arq, Inc. was founded in 1997 and is headquartered in Greenwood Village, Colorado.

About Cabot

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.