Analyzing Cabot Microelectronics (CCMP) & Intel (INTC)

Cabot Microelectronics (NASDAQ: CCMP) and Intel (NASDAQ:INTC) are both mid-cap technology companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, dividends, profitability, earnings, institutional ownership and valuation.

Volatility & Risk

Cabot Microelectronics has a beta of 1.43, suggesting that its stock price is 43% more volatile than the S&P 500. Comparatively, Intel has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Cabot Microelectronics 19.38% 18.13% 13.00%
Intel 22.31% 22.65% 12.91%

Dividends

Cabot Microelectronics pays an annual dividend of $0.80 per share and has a dividend yield of 0.8%. Intel pays an annual dividend of $1.09 per share and has a dividend yield of 2.5%. Cabot Microelectronics pays out 23.7% of its earnings in the form of a dividend. Intel pays out 38.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Intel has increased its dividend for 3 consecutive years. Intel is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

93.1% of Cabot Microelectronics shares are owned by institutional investors. Comparatively, 67.5% of Intel shares are owned by institutional investors. 5.5% of Cabot Microelectronics shares are owned by company insiders. Comparatively, 0.1% of Intel shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings for Cabot Microelectronics and Intel, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cabot Microelectronics 0 1 4 0 2.80
Intel 4 12 25 0 2.51

Cabot Microelectronics currently has a consensus target price of $95.67, suggesting a potential downside of 2.31%. Intel has a consensus target price of $44.85, suggesting a potential upside of 3.32%. Given Intel’s higher probable upside, analysts clearly believe Intel is more favorable than Cabot Microelectronics.

Earnings & Valuation

This table compares Cabot Microelectronics and Intel’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cabot Microelectronics $507.18 million 4.90 $86.95 million $3.38 28.97
Intel $59.39 billion 3.42 $10.32 billion $2.85 15.23

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

Summary

Cabot Microelectronics beats Intel on 9 of the 17 factors compared between the two stocks.

About Cabot Microelectronics

Cabot Microelectronics Corporation supplies polishing slurries and pads used in the manufacture of integrated circuit (IC) devices within the semiconductor industry, in a process called chemical mechanical planarization (CMP). The Company is engaged in the development, manufacture and sale of CMP consumables. The Company develops, produces and sells CMP slurries for polishing conducting and insulating materials used in IC devices, and also for polishing the disk substrates and magnetic heads used in hard disk drives. It also develops, manufactures and sells CMP polishing pads, which are used in conjunction with slurries in the CMP process. The Company also pursues other surface modification applications through its engineered surface finishes (ESF) business. The Company offers CMP polishing pads, under the Epic and NexPlanar brand names, for a range of applications and technology nodes.

About Intel

Intel Corporation is engaged in designing and manufacturing products and technologies, such as the cloud. The Company’s segments are Client Computing Group (CCG), Data Center Group (DCG), Internet of Things Group (IOTG), Non-Volatile Memory Solutions Group (NSG), Intel Security Group (ISecG), Programmable Solutions Group (PSG), All Other and New Technology Group (NTG). It delivers computer, networking and communications platforms to a set of customers, including original equipment manufacturers (OEMs), original design manufacturers (ODMs), cloud and communications service providers, as well as industrial, communications and automotive equipment manufacturers. It offers platforms to integrate various components and technologies, including a microprocessor and chipset, a stand-alone System-on-Chip (SoC), or a multichip package. The CCG operating segment includes platforms that integrates in notebook, two in one systems, desktop computers for consumers and businesses, tablets, and phones.

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